From the Irish Farmers Association I welcome Mr. Padraig Walshe, president, and Mr. Seán O'Leary, head of the climate change project team, Mr. Pat Smith, general secretary, and Mr. Thomas Ryan, executive secretary of the climate change project team.
Sustainable Food Development: Discussion with Irish Farmers Association.
Mr. Padraig Walshe
I thank the Chairman for the opportunity to address the committee. The IFA takes this issue seriously and we have set up a team under Mr. O'Leary and Mr. Ryan to keep an eye on what is happening, to address the issue and to make an impact on it and to make sure decisions do not negatively impact on agriculture in Ireland compared with anywhere else.
Climate change is a significant challenge facing the global community. The response to it must not restrict the opportunities for agriculture to create employment, develop export markets and expand into emerging markets. The response must address the key issues of energy security and food security, while also maximising job creation. The policy response must ensure sustainable beef production in Ireland, our largest indigenous industry, is not replaced by imports into Europe from less environmentally sustainable regions such as South America.
In its second report, the committee called for the introduction of climate change legislation that sets specific targets on a sector-by-sector basis, without taking into consideration the following facts: agriculture is the largest Irish-owned productive sector, accounting for more than 50% of exports from Irish owned manufacturing; agriculture employs 270,000 people, representing one in seven jobs in the economy; the gross value added of agriculture and the agri-food sector is €12 billion annually; the most significant reduction in emissions from the non-traded sectors since 1990 came from agriculture; emissions from the transport sector have spiralled, running at 178% above 1990 levels; Ireland is the largest exporter of beef into EU markets and the fourth largest internationally — Ireland produces beef 50% more environmentally efficient than the largest beef exporting nation, Brazil, because animals mature here at two whereas they take up to five years to mature in Brazil and, therefore, its emissions are much higher; carbon sinks such as forestry and permanent pastures are not recognised in the current accounting methodology — these sinks provide significant GHG reductions. In 2007, it is estimated that forest sinks alone accounted for a reduction in emissions of 1.36 million tonnes of CO2 in Ireland; emissions from the agriculture sector are organic, unlike transport; and the IFA estimates the agriculture sector has the ability to deliver an additional €2 billion of exports and 16,000 jobs.
Ireland is an agricultural economy and our emissions profile tells us this. A recent gathering of farming and agri-business leaders in the RDS heard eminent businessmen such as Kerry Group chief executive officer, Mr. Stan McCarthy, Glanbia's Mr. John Moloney and Aryzta's Mr. Owen Killian describe the future for Irish food production as bright with significant potential. The 26% greenhouse gas emission level attributed to agriculture ignores the carbon sinks provided by permanent pastures and forestry. In addition, this percentage ignores the thousands of acres that farmers have planted with carbon sequestering willows and other energy crops. This crude figure also ignores the renewable energy generated by the agriculture sector.
The second report of the committee refers to Ireland becoming a low carbon society. The facts are that relative to other beef exporting countries, Ireland has a low carbon model of production. The graph in the document I circulate highlights this. Emissions in Brazil are much higher per kilo of beef produced than in Ireland, Europe and elsewhere.
Unfortunately, we have go to the House for a vote. We shall suspend proceedings for ten minutes.
Sitting suspended at 4.25 p.m. and resumed at 4.45 p.m.
I invite Mr. Walshe to resume his presentation.
Mr. Padraig Walshe
The climate change law proposed by this committee completely ignores the issue of carbon leakage and instead proposes penalties and fines for operators in the non-traded sectors. It is unacceptable that climate change policy pursued by Ireland or Europe may increase international greenhouse gas emissions by shifting agriculture production to regions such as South America where it is much less efficient.
Irish agriculture has an environmentally efficient model that IFA estimates has the ability to deliver an additional €2 billion of exports and 16,000 jobs. This sector must be supported to expand and create employment and must not be suppressed by unreasonable misguided environmental targets. If we regard climate change as important, the EU must immediately climate-proof all existing trade policies and ensure that food imports from regions such as South America, New Zealand, Russia and China, anywhere else in the world, achieve the same environmental sustainability targets as those achieved in Ireland.
The committee's report correctly identified energy security as a significant resource and geopolitical concern for Ireland and the EU. Equally and perhaps of greater importance is the issue of food security. The perfect food poverty storm is currently emerging in front of us with 1.4 billion people living in extreme poverty and 26% of children under five years of age undernourished. Demand for food is projected to increase by 70%, by 2050. Demand for meat is projected to increase by 85% by 2050. In tandem, the UN has set a target that greenhouse gas emissions will reduce by 85% by 2050. The UN millennium development goal seeks to halve global hunger by 2015.
Today we may not consider the issue of food security as a major issue within Europe. However, in the context of increased population growth, food poverty and increased demand for food, the issue of food security cannot be ignored. It is real for more than 1 billion people in the world. Ireland and other countries within Europe such as Denmark, the Netherlands and Belgium are vital to providing a sustainable supply of meat and milk products to EU countries which are highly dependent on imports, such as the United Kingdom, Sweden, Italy, Poland and Lithuania. At a time of projected population growth and demand for food there is an intrinsic obligation on Ireland and the EU, in responding to the climate change challenge to plan for and provide for this increased demand.
The carbon tax proposed in the upcoming budget will be another increased cost. Carbon tax is supposed to be budget-neutral but as proposed by the Commission on Taxation it will just be another cost on business. It is fine for someone living in an area serviced by public transport and where there is the option of using it but living where I and most of my members live, there is no public transport option and no option but to use fuel oil to harvest our crops and to feed our animals. This is an issue that has to be addressed. The ESRI working paper in June 2006 stated, "Unless farmers in other countries are taxed at a similar level, Irish farmers would have to accept a lower income, although some would be forced out of business. Lower beef or milk production in Ireland would reduce methane emissions in Ireland, but as global emissions are driven by meat and dairy production rather than the location of production, emissions elsewhere would increase by the same amount." Therefore, the introduction of a carbon tax in the agriculture sector is a flawed environmental argument.
The report published by this committee identifies the poorest countries as contributing least to the problem of climate change. This is a well rehearsed and unchallenged statement which is often widely accepted. However, in the case of agriculture this statement is wrong. Agricultural greenhouse gas emissions from Annex 1 countries, with the exception of New Zealand, have declined since 1990. However, agricultural emissions from the non-Annex 1 developing countries have increased by 32% over the same period. The greenhouse gas emissions accounting methodology developed by the Intergovernmental Panel on Climate Change contains a number of anomalies. For example, the methodology used does not allow the agriculture and forestry sectors to receive the carbon credit associated with emission reductions through the production of renewable energy. The energy and transport sectors benefit from reductions in greenhouse gas emissions for emissions actually reduced from the agriculture sector. This reduces the incentive for the agriculture and forestry sectors to develop and grow renewable energy output. It is essential in Copenhagen that greenhouse emission reductions made by the agriculture and forestry sectors are recognised and are counted as part of the overall net contribution of the agriculture sector and not attributed as they are at the moment to other sectors.
The IFA has identified mitigation as the area where agriculture can play the greatest role. The mitigation strategy is based on three key pillars: maximising the carbon sequestration potential from the forestry sector; recognition of the significant carbon sink that we have in our permanent pastures; and reducing the nation's carbon footprint and increasing energy security by harnessing the potential of renewable energy production.
The negotiations towards a new climate change agreement have put forests at the heart of the agenda. Forest loss, primarily tropical Amazonian deforestation to provide beef for international markets, accounts for approximately 17% of global greenhouse gas emissions. However, sustainably managed forests play an important role in climate change mitigation. Forests, hedgerows and grassland all act as a carbon sink and provide a range of opportunities to offset rises in greenhouse gas emissions directly. In 2007, it is estimated that forest sinks alone accounted for a reduction in emissions of 1.36 million tonnes of carbon dioxide in Ireland. Some 80% of forests planted since 1990 in Ireland are privately owned and therefore account for the majority of these emission reductions.
Over the five-year period from 2008 to 2012, Kyoto eligible Irish forests, those established since 1990, will contribute 11 million tonnes of carbon dioxide or 22% of forecasted reductions from national climate change strategy measures. This represents a saving of €220 million to the State. Forest sinks must be included as part of the measurement of emission reductions in the agriculture sector. In addition, the inclusion of forest sinks will contribute indirectly to emission reductions in the energy sector, through the production of wood biomass.
Permanent pasture is a characteristic of farming in Ireland, with more than 90% of total agricultural area in under permanent pasture. This permanent pasture stores carbon and provides an environmental competitive advantage for beef and dairy herds, when compared to the high concentrate diets and deforestation associated with other international beef and dairy-producing regions. Currently, carbon credits from carbon sinks are not attributed to agriculture. Ireland has the highest level of carbon sequestering permanent pastures in Europe, which when combined with the opportunity to expand the forestry cover can promote a substantial national carbon sink. CO2 emission reductions achieved through natural carbon sinks, such as forests and permanent pastures, must be included in the overall measurement of the contribution of the agriculture sector to emission reductions.
In January, the IFA launched a policy paper that identified the potential to create 8,000 green-collar jobs from renewable energy production and greenhouse gas emission reductions. Earlier today, I met many of the committee members at our pre-budget lobby session. In the pre-budget submission the association is seeking a programme of measures that will support farmers to achieve the renewable heat, electricity and transport targets while reducing greenhouse gas emissions. IFA members are currently developing anaerobic digesters, exploring the opportunity to generate gas from grass, and supplying biomass to semi-State bodies such as Bord na Móna and ESB. With the correct market conditions in the wind area the IFA is confident that farmers can play a pivotal role in achieving the 40% renewable electricity target by 2020.
Regarding on-farm renewable electricity production, it is essential that the planning regulations are amended, the gate system is overhauled and a commercially viable REFIT tariff is introduced. Other measures required include capital allowance relief and smart and net metering.
The achievement of the 12% renewable heat target by 2020 presents the greatest challenge of all the renewable targets. The IFA seeks the amendment of the afforestation and bio-energy scheme and the introduction of a biomass mobilisation programme and a biomass public procurement initiative.
In the case of renewable transport the MOTR scheme must be amended to introduce a "use or lose" clause for recipients of the relief and the reallocation to companies capable of producing indigenous transport bio-fuels. The IFA believes the announcement this week by the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, requiring fuel companies to implement a 4% bio-fuel blend will not help the stimulation of bio-fuel production in this country. Rather it will encourage imports, because the multinational oil companies will source bio-fuels where it is cheapest. This is not a sustainable option, as it will mean an ever-increasing cost to the economy and the environment. When making his announcement the Minister stated that he wanted to reduce our dependence on imported fuel. However, this proposal will do absolutely nothing to reduce that dependence.
European citizens and the agriculture sector must get a fair deal in Copenhagen. A climate change deal which does not address the specific agriculture policy issues of food security, international carbon leakage and sustainable agriculture will be a bad deal. I want to acknowledge the role of the Taoiseach's office and the Departments of Agriculture, Fisheries and Food, and the Environment, Heritage and Local Government in making progress in this area. However, the Copenhagen round of negotiations is imminent. Food security must be included in the ongoing re-examination of the 2003 European security strategy.
We are extremely positive about the potential of the agri-renewable energy sector. However, change is required in the way the ESB and the Commission for Energy Regulation approach the market. Change is also required in the current REFIT tariff and the delivery of the measures outlined to harness the real opportunities from this sector. The current emissions accounting methodology must be reviewed to include the positive contribution that forestry and permanent pastures make to reducing greenhouse gas emissions in the agriculture sector. The methodology used must allow the agriculture and forestry sectors to receive the carbon credit associated with emission reductions through the production of renewable energy.
Job creation, economic recovery and environmental sustainability must be the cornerstone of Ireland's response to climate change. The importance of agriculture to the economy must be recognised and also its low carbon model of food production. Europe must not accept lower environmental standards from other regions for the sake of an international compromise in Copenhagen. This committee should give full support to ignite the real potential of this most important productive agriculture and agri-renewable sector.
I welcome representatives of the IFA and its president in particular. It is fair to say there was a time when the IFA did not take climate change very seriously. There was a time when I did not take it very seriously either and that has changed. The fact that the president decided to come himself is recognition of that and is welcome.
The Minister has set a requirement for all petrol and diesel to have a 4% bio-fuel content through blending by the middle of next year. I agree with Mr. Walshe on this. I believe it makes no sense, commercially, financially or from an environmental point of view to import bio-fuel from Brazil or North America in order to blend with fuel for the transport sector or for home heating fuels. The carbon footprint involved in transporting it half way across the world starts to undermine significantly its value in terms of reducing emissions. A bio-fuel, whether it is bioethanol or biodiesel, will reduce emissions by approximately 35% compared to normal petrol or diesel. I question the sense in requiring companies to import large volumes of bio-fuel. If we are to go down the bio-fuel route — I believe we should — any mandated blending requirement should go hand-in-hand with a very proactive aggressive roll-out of supports for the bio-fuel industry in Ireland. We only have one large commercial bio-fuel producer, which is in New Ross, County Wexford. There are smaller bio-fuel operators as well, but they are all struggling because they cannot compete with the cost of imported bio-fuels. Until recently, there was a crazy situation in which the Government gave certificates to companies to import large volumes of bio-fuels, subsidised by the taxpayer. Essentially, bio-fuel companies that did not have such certificates were being put out of business because they could not compete. This country's bio-fuels strategy has been riddled with real mistakes. If we are serious about using large volumes of bio-fuels in Ireland, as the Minister is proposing, we need to make sure the vast majority of such fuel, if not all of it, is produced in Ireland. If we do not do so, the whole strategy is self-defeating. I strongly agree that Ireland has the capacity to produce second and third generation bio-fuels, such as ethanol from straw and waste oils for biodiesel. While there may be some potential for first generation bio-fuels, most of the potential is in second and third generation crops.
With regard to renewables, Ireland is perhaps the most suitable country in Europe for the promotion of microgeneration. Farmers would benefit significantly from a sensible export tariff that would allow them to produce their own power, by and large. When they have excess power, they should be able to put it back on to the grid for an acceptable tariff. The current tariff does not incentivise that — one gets 19 cent per kilowatt hour for the first 3,000 units and 9 cent thereafter. That is not competitive. It makes no sense that farmers have to buy power off the grid for significantly more than they can sell it back onto the grid for. I strongly believe we should put a decent and generous tariff in place for a set period of time to allow investors — in this case, farmers who may have to run dairies or grain stores — to generate their own power. When they are not using that power, for example at certain times of the year, they should be able to make a trickle contribution back onto the grid. That would make a great deal of sense from a grid management point of view. I am sorry to labour this point, but I think it is an important issue for farmers.
The advantage of microgeneration is that one does not have to upgrade the electricity grid, or spend the billions of euros we are planning to spend to facilitate renewables through large-scale wind firms and ocean energy projects. One does not require a significant grid capacity for microgeneration because small trickles of power are coming onto the grid all over the place. If we could do something about that, it would be useful for farmers. They would buy into it in a major way through micro-turbines and biomass-powered micro-generators and heaters, etc. I recognise the contribution of anaerobic digesters. Perhaps the most impressive presentation I can recall at this committee was the grass to gas proposal from our friend in University College Cork.
I would like to comment on the forestry sector in the context of carbon sinks. There is a slight misunderstanding in this regard. We are lobbying hard to get new forestry recognised as a contribution towards a carbon sink that could counteract emissions in other areas of agriculture. We are not necessarily trying to get forestry that existed in the base year of 1990 recognised as a carbon sink. Other countries have far more forestry than we do. In Ireland, approximately 10% of the land mass is afforested whereas in most European countries, that figure is 30%. We want a new afforestation programme, whereby forestry that has been developed since the base year of 1990 and forestry that will be developed in the future are included in the calculation that is offset against the rest of the potential emissions coming from agriculture. We need an aggressive afforestation programme. As I said earlier, the Government's climate change strategy assumes there will be an afforestation programme of 15,000 hectares a year. All of the Government's calculations for its climate change targets are based on that. The most recent programme for Government provided for 10,000 hectares a year. The reality is that there are between 5,000 and 6,000 hectares a year, at best. That figure is likely to reduce because the Government has reduced forestry premiums. Most importantly, there is uncertainty in the forestry sector about whether premiums will be reduced even further next year when more savings need to be made. Everything we are saying about forestry is contradicted by what our budgetary strategy is doing to promote forestry. At a time when here is a Green Party tinge in government, the IFA should be pushing this issue aggressively — I suspect that it is. The IFA should be calling the Government to account in this regard, just as Fine Gael is trying to do as an Opposition party.
I reject the suggestion that our recent climate change Bill was based on a belief that the potential exists to punish farmers and others in the agriculture industry for not meeting targets. We made it clear at the launch of the Bill that we were not doing that. We said in the Bill that sectors which sign up to targets but do not meet them need to face the consequences. We were primarily talking about companies like Bus Éireann or Iarnród Éireann. The Government said it would reduce emissions from the Dublin Bus fleet by 15% over five years but five years on, nothing had happened. There needs to be a consequence in such circumstances. Nobody from my party — I will let Deputy McManus speak for the Labour Party — is suggesting that a farmer or a collection of farmers should be fined. Whenever this committee has discussed the production of beef, it has made it clear that the idea that we can save the world by going vegetarian is absolute madness. While it can be argued that a reduction in the size of Ireland's herd would help us to meet our targets, the reality is that if we do not produce beef here, it will be produced elsewhere in a manner that is less efficient in terms of emissions. Apart from New Zealand, Ireland is probably the most efficient beef production country in the world, from an emissions point of view. We should be producing more beef in Ireland because we are good at it. That should be taken into account when targets are set for us from a European perspective. The parts of the world that can produce meat and food most efficiently, from a carbon point of view, are those that should be concentrating on it and rewarded for it. I would strongly oppose any suggestion to the contrary.
I will conclude by asking whether the IFA is active in trying to promote farming practices that reduce emissions. Is it looking at what cattle are fed, for example? I refer to the feedstuffs that make up the diets of cattle. That has been done very successfully in New Zealand. Is the IFA examining which parts of the country may suit direct drilling, for example? Is it working on a crop rotation policy for farmers? Is it giving advice and assistance in such areas in a manner that will help to reduce emissions while allowing farmers to continue to operate in a satisfactory and commercial way?
I was astonished when the president of the IFA delivered that section of his speech. I thought he had copied it from our submission on the need to scrutinise the European Commission's proposals. In our written submission, we said the same thing the IFA is saying. We went to the trouble of going to Brussels to lobby on behalf of the agricultural sector. We are promoting Ireland as a green food basket for the rest of Europe. With respect, the IFA should withdraw the suggestion that we are in some way trying to be anti-agriculture in what we are proposing. None of the proposals made by the joint committee is anti-agriculture. Members fully recognise the importance of the agricultural sector. We have consistently sought to have forestry taken into account in terms of offsets. We are blue in the face from doing so and our efforts in this regard will continue.
I apologise in advance for leaving before the delegation responds to my questions. I will, however, read the Official Report. While I am interested in the thoughtful and helpful presentation made by the Irish Farmers Association, I am puzzled by Mr. Walshe's statement that the joint committee, in its second report, "called for the introduction of climate change legislation that sets specific targets on a sector-by-sector basis, without taking into consideration" a series of facts which he then proceeded to list. From where did Mr. Walshe get this idea?
Mr. Padraig Walshe
It was not obvious in my statement. I will ask Mr. O'Leary, our expert in this area, to comment. The real issue, however, is the importance of agriculture to the economy.
I did not dispute that. I asked how on earth the Irish Farmers Association arrived at this idea.
Mr. Seán O’Leary
The core provisions of the report refer to the "introduction of penalties (fines) for operators in the non-traded sectors who do not meet statutory targets." Our perspective on this is in terms of the revised programme for Government which refers to a 3% sectoral target.
The penalties are included in a different section of the report. The Government is responsible for what actions it takes. I ask the delegation to appreciate that the purpose of the joint committee is to work on an all-party basis to address an issue that transcends politics. We welcome any information to assist us in determining how we will meet the targets set by Ireland at international level in co-operation with other countries.
This is not a battle between the IFA and the joint committee. It may be possible to achieve a better understanding of how we operate given that, as the Chairman noted, the joint committee's report addresses many of the points made by the delegation. We are, for example, conscious of Ireland's role as a food producer. Ireland's position as an agricultural, beef producing country creates a difficulty and challenge for us in dealing with greenhouse gas emissions. The role of agriculture in this regard will be limited which means we will have an excessive reliance on energy. I ask the delegation to accept this point before we proceed to questions.
What is the IFA's position on genetically modified foods? Given the association's focus on the issue of food security, perhaps it could answer that question. On energy crops and bio-fuels, how can we ensure we build and expand our potential in this sector? A question arises as to whether the use of fertiliser creates more problems. How do we achieve a good policy on the Irish bio-fuels industry and its potential?
Deputy Coveney addressed the issue of wind generation. Other European countries have achieved much greater progress in the use of anaerobic digestion. Is it possible to develop this sector and, if so, what is required? I know the delegation will argue that money is required but, as the IFA is well aware, money is scarce.
Irrespective of whether one opposes or supports it, a carbon tax will be introduced.
Mr. Padraig Walshe
It should not be called a carbon tax unless it is budget neutral.
I fully agree. It is a travesty to have a carbon tax that will be used to fill a black hole. Carbon tax is supposed to be revenue neutral and most people accept that it should be used in a way that encourages and incentivises us to reduce carbon emissions. If carbon tax is to be revenue neutral in a broad sense and is used to reduce our carbon emissions, what is the best use of money from that source in agriculture? What is the IFA's priority given that we will not be able to do everything?
I welcome the delegation. There is no conflict between the IFA presentation and the aims of the joint committee. While energy security must be tackled, we must also address food security and job creation. It goes without saying that in the 1980s, when we had a recession, farming played its part in getting people back to work and the country back on its feet. Farming can also play its part in this recession, which is probably the worst in our history. We need to marry food security with energy security and job security. Farming can make a contribution through energy crops, bio-fuels, wind farming and other means. I come from a farming background and farmers are ready to help get the country back on its feet. All we want is support from the powers that be.
We must be careful in how we deal with afforestation. We all agree the level of afforestation, at 60,000 hectares of plantation per annum, is low. In other countries such as Switzerland and Germany, total land under afforestation is 30% or 40%, whereas the figure here is approximately 10%. As a grassland based country, which produces food and meat, including lamb, pork and beef, we should set a maximum figure for afforestation of between 15% and 20%. This is an important issue on which we should focus. While afforestation may be beneficial, I would be worried if the proportion of land under afforestation in Ireland were to exceed 15% of the total.
Ireland should focus on food security. Our farmers are the best producers of food in the world and the country is the fourth largest beef exporter in the world, a figure which speaks for itself. We must be careful about changing the current system because it is very good. I accept, however, that we must modernise to ensure the system keeps with the times. It is regrettable that afforestation, permanent grassland, pasture and hedgerows are not taken into consideration as part of the carbon trading schemes, although I understand the position will change from 2012 onwards.
I compliment the Irish Farmers Association on the role it continues to play in revitalising the economy. Farmers can help in the areas of employment and energy security. There is no conflict between the IFA and joint committee. We should move forward together to get the economy up and running again with the help of the farming community.
Mr. Padraig Walshe
As Deputy Aylward stated, there is no need for conflict. Perhaps we misunderstood the section of the report which recommends the introduction of penalties or fines for operators in non-traded sectors, of which we are part, that do not meet statutory targets. We assumed this statement also referred to farming. I apologise if we misread the intentions of the joint committee in this regard. I am also pleased the matter has been clarified and we take the same line on this matter.
As Deputy Coveney stated, the farming sector takes climate change very seriously. Agriculture is the sector of the economy most dependent on the climate. If, over the past three years, someone had told a farmer that Ireland is not experiencing climate change, he would have found it hard to believe. We work with the weather every day and the industry is dependent on the climate. The point I made earlier about the 4% bio-fuel content is that when the United States wanted to start its bioindustry, it put a 53 cent per gallon tariff on imports of bio-fuel into the United States. That was guaranteed for a number of years to allow an indigenous industry to get up and running. I can understand the Minister, Deputy Eamon Ryan, setting a bio-fuel target for this country but it is contradictory for him to say in the same statement that he wants to try to reduce our dependence on imported fuel.
The measure is to begin next June, even though no crops were sown this year and will not be harvested by then. I heard about an Internet reality farm on Facebook or some such site and it has become a craze with young people. I discovered that they sow crops and harvest them within a day or two of sowing them. The Minister must subscribe to that approach if he thinks we can sow bio-fuel crops and have them harvested and ready for use by next June. That is just not physically possible, as we all know in this room.
It is not financially viable either.
Mr. Padraig Walshe
As Deputy McManus said, money is scarce. People who have sown crops for bio-fuels in recent years have got burnt. That is the reality. People who have sown crops for animal feed have got more money, even though that has not been good. No one at farm level in this country has made money in the cereals sector in recent years. Merchants and millers may have made money but it was not made at farm level. One must question whether we are serious about bio-fuels and microgeneration. When the Green government in Germany wanted to get microgeneration going, it put in place a high tariff for people who invested. That tariff was guaranteed for 12 years. It was approximately——
Mr. Seán O’Leary
Forty four cent.
Mr. Padraig Walshe
——44 cent per kilowatt hour, whereas the usual rate there is approximately 12 cent. That ensured people who made the investment were assured of a return. There is no way anyone in this country is going to make the necessary investment for the type of returns they are likely to get, which is totally at variance with the price of oil or other fuels. Some guarantee or incentives are required if we are serious about microgeneration and bio-fuels. It just will not happen otherwise. It is not a case of farmers looking for more money, I am stating a fact. It takes serious investment for microgeneration.
I addressed the issue of existing forestry versus new forestry. I am pleased to hear that the Chairman made those points in Brussels. We will not get any credit for the fact that we have a huge volume of pasture in this country, and always had, but people going to Copenhagen who will make decisions need to realise that if we are forced to reduce our stocking rate because of our emissions, that will mean less efficient production of the same product compared to places such as Brazil where they have chopped down the rainforests in order to produce beef. That is a practical example that we are seeing every day. Perhaps Mr. Ryan can help me out on that point.
Mr. Thomas Ryan
One hectare of Amazon rainforest is lost to cattle ranchers every 18 seconds.
Mr. Padraig Walshe
That is the same as an area the size of Munster being cleared in a couple of months. What is happening is serious and it is still taking place. People need to be aware of that.
I was asked whether we are considering ways to reduce emissions. Yes, we are. We have been talking to Teagasc and I have seen some of the research that has been carried out in New Zealand in terms of trying to manipulate the diet to reduce the methane emissions from the national herd. We have been in talks with Teagasc in order to get it to do some of the research that is needed. Much research is needed in this area in order to reduce emissions.
Reference was made to the no-till operations. That is catching on but it is taking time. Tillage is not the largest sector. The livestock sector is the big concern in terms of emissions reductions. I hope it will be possible to work on manipulations within the diet. There are interesting developments in New Zealand also in terms of fertilisers to reduce losses into the atmosphere. We have been talking to Teagasc about that and I hope some work will be produced in that area. We will help to promote that when it is available.
Deputy McManus inquired about our position on GM foods. Our position on GM and any other scientific development is that one should never ignore science. One does so at one's peril. I deplore what is happening in terms of the approval of new GM varieties of soya, maize and other crops that are being imported into this country for animal feed. It is adding extra cost to the price of animal feed in this country for the small amount that we feed. On the other hand, food is being imported into the community from other parts of the world where GM products are used. We are expected to compete with that on the shelves. Chicken is the perfect example in terms of the volumes of it that are imported. Deputy Doyle attended our conference last week and he heard some of the comments made in that regard. It is a major issue.
The GM debate got off to a bad start in this part of the world. Commercial companies did not do themselves any favours in the way it was presented initially. It is no different from the debate on mobile telephones and masts. When television was introduced some people would not allow it into their houses and, similarly, with radio. In spite of the debates about mobile telephone masts, everyone uses a mobile telephone. There is a great deal of fear of the unknown when it comes to new developments and GM is another such issue.
As a country we are going in the wrong direction. I disagree with the programme for Government agreement between Fianna Fáil and the Green Party, which has the objective of this country being GM-free. That is not possible. It is like saying we will be mobile telephone-free. The rest of the world is using GM crops. The target is to double the yield of the maize crop in the next 30 years and they are well on their way to doing that. We should be applying GM technology to our grass crop to increase its yield so that it will sequester more carbon and in the process produce more dairy and more beef. That is possible and we should be directing our scientists in that direction. Commercial companies will not spend the money on developing the grass crop in the way they will on maize or wheat where the seed is bought every year, which is not the case with grass.
The question was asked about what is the priority if a carbon tax is to be revenue neutral. It should be revenue neutral. It is ridiculous that we would introduce a carbon tax in this country when we already have an 8.5% gap in VAT rates between here and Northern Ireland. Are we to introduce a carbon tax which will not exist in the UK and which will increase that gap even further? We will end up with a healthy black market for coal and other products being brought from the North. Pensioners will probably be ripped off by people selling such products. The price of solid fuel will be affected as well as liquid fuels. I invite Mr. O'Leary to comment.
Mr. Seán O’Leary
Deputy Coveney inquired about microgeneration with a sensible tariff. That is the essential point. Grant aid is important, but we must ensure that the product is being paid for and there is security of supply. I was in Mayo last week where 250 farmers were packed into a room. They are very interested in this concept. They see it as a way of supplementing their own costs but also providing an additional income, which is the case throughout the rest of Europe. Impediments are placed in their way and there is no encouragement. Farmers are looking at this seriously, so it is disappointing to stand before them and take the wind out of their sails on the overall economic feasibility of this. There is no payback over a five to seven year period. There is absolutely no clarity on the equipment and no advice is being given. Farmers are interested. They are prepared to put their capital on the line if they get the long-term price security to get the industry off the ground, as has been done in every other European country. Farmers are open to all of this if the incentives are put in place.
The issue revolves around the definition of microgeneration. Here in Ireland, microgeneration occurs at 11 kW, but across Europe that happens at 50 kW. Farmers would find that latter figure much more attractive. There is no point in putting up one or two small turbines that will not supply their own electricity needs, not to mind supplying the grid.
We need more forestry. The president made the point that 80% of all new afforestation is by private landowners. The benefit of that must accrue to the landowner. We have problems with the accounting methodology, something that is due to be discussed in Copenhagen. There are opportunities with land use, but the credit for that must go back to the landowner.
The statement that New Zealand is the only country better than us on beef brings us back to the accounting methodology again. Every country has different accounting methodologies. The Dutch will come up with numbers which show that their produce is the most environmentally friendly, but where does the accounting process start? The Dutch obviously work from an intensive feed-based system, importing foodstuffs from all over the world, but they do not count that. We in Ireland have a grass based advantage, and this is our main asset. We can go anywhere in the world and sell that concept. It appeals to the consumer and we have that advantage. The president outlined the importance of agriculture. We must use that advantage in an environment where food will be in demand.
There is no doubt that we must improve on what we are doing, but the overall impact of diet manipulation and direct drilling will only have a small impact on the mitigation of emissions from agriculture. The area of electricity and renewable energy sources is where we can make our main impact. The Government has that freedom to place targets on sectors, which is why we were disappointed to see that 3% sectoral target across the board in the programme for Government. People might say that it is just a programme for Government, but it is there and we have a problem with it.
We see a certain similarity between our approach to the Copenhagen negotiations and our approach to the WTO. Europe has put its cards on the table. It is fine to take a lead, as long as it does not disadvantage the members, and we are looking at this from the point of view of Irish agriculture. That is something we must bear in mind. We have our cards on the table with a 20% target. It could be between 20% and 30%, depending on what comes out of Copenhagen. The US climate change Bill has been published, but we have seen little concrete evidence that all of the participants are prepared to engage.
The Minister made an interesting point when he asked who were the developing countries. The Brazilian ability to clear Amazon rain-forests and displace Irish and European products is a major worry for us.
Mr. Thomas Ryan
We need a centre for renewable entrepreneurship. This is not a new quango, but if our members want to get involved in anaerobic digestion or renewable energy projects in general, they find themselves tripped up and going between the local authorities, Sustainable Energy Ireland, the Department of Communication, Energy and Natural Resources, the Department of the Environment, Heritage and Local Government and the Department of Agriculture, Fisheries and Food. It just becomes a busy track which kills the incentive. We need to take the key expertise from these Departments and set up a centre for renewable entrepreneurship, composed of people who have the expertise and who will work with farmers who are prepared to put their money in place.
We have two members who are currently spending €1 million each on the development of a 1 MW anaerobic digestion project. These guys are slowly weaving their way through the project. To say that their enthusiasm has been sapped or drained is an understatement. The announcement on microgeneration by the Minister, Deputy Ryan, is for ten cent for non-ESB customers and 19 cent for ESB customers.
It is only for the first 3,000 units. That is just €500 per annum, but a business would be through it in six weeks.
Mr. Thomas Ryan
Yes. When our guys go to finance these projects, there is no certainty involved.
The State has spent €15 million to provide funds to Teagasc and other research bodies. We need this knowledge transfer to go back into our sector quickly. The proposed cut in the suckler cow scheme in the recent report by an bord snip nua cited reductions in greenhouse gas emissions. Perhaps it would be worth sending those economists a copy of this submission as well.
The greatest tragedy of all is probably the cut in REPS. We can say that REPS has delivered for the economy and for the environment. There are more than 65,000 farmers in REPS, who have grown about 17,000 km of new hedgerows. That in itself has sequestered about 4 million tonnes of carbon in the soil. The scheme is now being cut, even though it is delivering what we want. The an bord snip nua proposal seeks to undermine a sector that provides a low carbon model of production. There are flaws in the way wider policy approaches agriculture and the low carbon economy.
Mr. Seán O’Leary
I wish to make one comment on the interaction between the Department of Agriculture, Fisheries and Food and the Department of the Environment, Heritage and Local Government and the lack of a joined up approach to food, energy and climate. Those Departments must work in close harmony at both national and European level.
It is worth reiterating that what we are proposing is the establishment of an office for climate change and renewable energy under the auspices of the Department of the Taoiseach. This office would be responsible for policy formulation and implementation, including, for example, the setting of policy in regard to Ireland's carbon fund. It is important that it come under the remit of the Department of the Taoiseach so that all other Departments can feed into it. Until that is in place, all the difficulties we have discussed will continue. That is one of the most important aspects of our report.
I thank the delegates for participating in what has been a beneficial debate. It is important that the IFA's view on this matter are heard. Members of the committee have frequently expressed similar views in terms of the value of agriculture to our economy. The climate change challenge is coming down the track and cannot be dismissed, and I and other members have articulated our concerns at the potential impact on agriculture of efforts to address that challenge. The transcripts of previous meetings of the committee will show that various members have defended agriculture in that respect. This meeting has been helpful for both members and delegates in clarifying the issues and misunderstandings of which we have already spoken. The targets we are talking about are statutory targets but they are not yet set. The agriculture lobby has important work to do in that regard and this committee, as a cross-party forum, is open to its concerns.
It is important that we guard against the dangerous and simplistic view that exists that by reducing beef production, carbon emissions will automatically reduce. The delegates challenged that today, as we have sought to do in our interactions with various parties. One need only make the simple comparison of the cost of producing beef from farm to table in Ireland or any other European Union member state versus producing it in Brazil, for example, to see what is at issue. Given all the implications for rain-forest depletion, transportation costs and so on, I have no doubt that the carbon emissions associated with the importation of that produce into Europe will kick the whole argument out. It is important that these issues are made clear at all levels.
It is important that we focus on the issue of renewables. I have spoken to farmers who are extremely enthusiastic about getting involved in the renewable sector until they realise the barriers that exist. There is no co-ordination in this area between the relevant Departments, whether in respect of foreshore licences, wind energy and so on. Our archaic systems of government are hindering the development of renewable technology and are not facilitating efforts to provide entrepreneurs in this area with the support they deserve. This committee is trying to address that failure in various ways and we have made representations to the Cabinet sub-committee on climate change in that regard. There is no doubt about the damage that will ensue from the discontinuation of the rural environment protection scheme. Likewise, the reduction in afforestation premia is at odds with what we are trying to achieve. That must be noted by the committee.
In regard to mitigation factors, we have spoken about carbon sinks and permanent pastures. I understand it is difficult to do but has there been any quantification or measurement that can be referenced in that regard when the arguments are being made? The delegates said those factors are not being taken into account but we need to quantify them if at all possible so that account can be taken of them.
I thank the delegates for their contribution to this informative meeting. The agenda refers to meeting the challenges of climate change through sustainable food development. I compliment the IFA delegates on their presentation and on the documentation they presented to us, which contains a great deal of information on climate change, renewable energy, taxation and so on. It is a well produced and useful document. As I see it, the IFA is concerned with protecting rural Ireland; it is not trying to protect large farmers who are able to look after themselves. Like Deputy Aylward, I come from a very rural area. I am aware of the work done by the IFA and of the much needed lobbying role it performs in rural areas.
Regarding renewable energy, the document presented by the delegates states that Ireland spends more than €7 billion per annum on imported fossil fuels that have no downstream benefit to our economy. Will the details of the IFA's proposed stimulus package be provided before or after the budget? That would be a useful document to have and would offer scope for further debate. I have a very high regard for the work done by Teagasc and would like to see it being more successful in acquiring funding. I understand it is currently doing excellent work on climate change and renewable energy. How can that research be delivered, via the IFA, to the Government in order to facilitate its implementation?
Members on the other side of the House have put forward some good proposals in this area but Members on the Government back benches are as anxious as anyone else to drive change and improvement. A problem we all acknowledge is the amount of red tape involved in anything one tries to do. There is reference in the IFA document to the abolition of bureaucracy. I sincerely wish it were within the power of us backbenchers to remove much of the red tape within the various Departments and agencies of State.
The meeting has been more useful than I expected. I was perhaps the most keen to have the meeting and I did not foresee the misunderstanding that arose. Had it been us making a presentation to the IFA, setting out the background to our efforts in this area, the delegates would probably have a different impression as to what we have been about thus far. As Senator Coffey noted, the transcripts of previous meetings will show where we have been coming from.
Ireland's figure of 26% in regard to carbon output is primarily based on the fact that we are an agricultural country with a significant dependence on the land. The economy is skewed that way because we do not have significant heavy industry. Having said that, if there were a standard of equivalence in regard to calculations, we would probably find we are more efficient than New Zealand, for instance, where dairy output emissions are calculated on a per kilo of butter fat basis. We could argue that we are more efficient even in dairy production. The indication that we do not meet statutory codes as part of the core provisions is based on a total land use capacity which incorporates producing food in a carbon-efficient way, carbon sequestration and providing renewable energy. There is a tendency to adopt the panic position that the targets will inevitably be breached because everybody says agriculture is a substantial source of emissions. However, when it comes to the question of land use in respect of total carbon output, if one nets it out at the end, there is nothing to fear if our intended policy is adopted. As a farmer, I have a passionate interest in these matters. The concerns regarding carbon leakage relate to the issue of standard of equivalence. There is an acute awareness, particularly in the dairy sector, of potential penalties arising for us because other countries cannot produce as efficiently as we do and have not signed up to the process.
Several issues were raised in regard to genetically modified foods only one of which related to science. Valid points were made in regard to international patent law and the question of biodiversity and they must be looked at. I do not know that one can produce food efficiently with a rising population and rising demand without embracing this. Mini-till will further reduce carbon emissions. Teagasc and SEI have a dual role to create a centre of excellence in thinking. SEI should be the main drivers of this.
My next point concerns forestry. If we factor historical forestry into our calculations, we lose out. We will win out proportionately if 1990 is used as the base year. I am interested in the proposals for forestry. Can the forestry development programme be reignited? A caveat on this is that it must be compatible with keeping adequate food production. As with renewable energy, we must not compromise. The US tariff on renewable energy drove us to a wheat shortage in the food sector. They had to rethink this and tweak it a little towards second generation instead of just ethanol from wheat production.
Mr. Padraig Walshe
I will respond to the last point. It is not entirely correct to say that the drive to ethanol created a food shortage. This was blamed for it but was not the cause of it. Wheat stocks in the world had been dropping for several years. This leads to the volatility we have now. Politicians and bureaucrats around the world cannot see the sense of having food in storage as they did 20 or 30 years ago. This will lead to increased volatility and shortages, regardless of what happens with bio-fuels. We must address this issue.
It is great to see the committee members well versed in this matter. Our assumption was totally wrong. A line in the report stated that there should be penalties or fines and we assumed agriculture was included in this. The Chairman referred to changing Departments. There is a Department for Communications, Energy and Natural Resources. Most of the natural resources are in agriculture and perhaps that should be included in the Department of Agriculture, Fisheries and Food. There must be greater co-ordination across Departments. Senator Coffey referred to incentives for microgeneration and permanent pastures. That has worked in many other countries around the world where incentives are put in place. I was in Denmark ten or 15 years ago and every second farm had a windmill generating electricity for the farm and selling a surplus to the grid. That can and should happen here. We have more wind than Denmark does. It should be possible in Ireland but the incentives have never been set up.
Deputy Fitzpatrick asked about our proposals. Our document was circulated earlier in the year but we can circulate it to the committee again. I know that when one receives a great deal of documentation, one can never find a particular document when one wants it. Our document contains many proposals. A substantial research fund was set up by the State two years ago. I am not sure if it has been cut but I believe it is substantial. If I may be bold enough to suggest the committee makes a recommendation, there is a need for these research funds to be spent on climate change. Whether given to organisations such as SEI or Teagasc, much research must be done to back this up. Mr. O'Leary told me that some research on the beef area will lead to a report being published.
Regarding the forestry programme, the cuts in premia last year reduced the amount of planting. There is great fear because forestry is a long-term project. Long-term guarantees must be provided and many people fear their land is devalued because it can never be taken out of forestry if the next generation want to do so. This comment has been made to me many times. The change in the economy in the recent years means that people are considering things they did not consider a few years ago. These are changing times.
Mr. Seán O’Leary
We learned quite a bit from the nitrates debate. As an organisation, we worked closely with Teagasc in fast-tracking research and getting information that we and the Department can use at European level. Teagasc has been doing much work on quantifying our greenhouse gas emissions per kilo of production in dairy under Mr. Laurence Shalloo and in beef under Mr. Paul Crossan. It has been quantified from farm to fork. The report is due before the end of the year. It will prove invaluable. When there is a lack of something quantifiable, supermarkets come up with their own accounting methodologies and use these for their own purposes. This has been done in the UK. As a country, we do not want to see this happen because we know we can back up our country's production systems in terms of emissions. We must be able to get this message across and use it to our advantage.
We have been saying that for ages.
Mr. Thomas Ryan
Senator Coffey asked about carbon sinks. Teagasc and the EPA produced the STRIVE report series No. 24 in which the potential of carbon sinks, particularly in soil, was examined. Five sites were analysed over a number of years. Each site was a carbon sink, which is an important point about permanent pasture, and the most favourable showed a rate of 5.8 tonnes of carbon per hectare per year. While we do not have significant new permanent pastures since 1990, the existing permanent pastures continue to be a carbon sink on the basis of the outcome of that work.
Some members referred to New Zealand, which is a fantastic country in respect of how to market and brand a country. New Zealand changed government and when the new climate change Minister visited Poznan in December 2008, a level of honesty came into the debate when he said that it was wrong for New Zealand to claim to be a world leader on climate change when it had the third worst increase in emissions worldwide over the past nine years. This is a comment on New Zealand being put out there as a model. In 1990 the total emissions of New Zealand were quite similar to Ireland today. Since 1990, total emissions from New Zealand have grown by 26%, with agriculture the primary driver of emissions. This is in contrast to Ireland, which has reduced its emissions by almost 7%.
Regarding biomass and forestry in general, we must create a market in the same way as for renewable energy. The documents I will circulate to the committee contain a proposal for a public use obligation. What can this State do? Schools, hospitals and institutions could be told funding would be provided in return for having a requirement that 30%, 40% or 50% of their fuel must be sourced from the biomass sector. If we create a market, there will be no better entrepreneurs than the farmers to follow.
Mr. Seán O’Leary
The supply chain is very important for this.
Mr. Thomas Ryan
I wish to make another point on efficiency. We have spoken much about beef, but it is worth noting that work carried out by Teagasc showed that increased efficiency on farms with dairy herds had led to a reduction in emissions per kilo of milk of 12.5% between 1990 and 2006.
Mr. Pat Smith
There are 3,000 acres of miscanthus sown in the country and an incentive was put in place to grow it. However, there is no follow through by way of creating a market for the product and farmers have been left high and dry. This has left a very sour taste and a negative attitude towards the potential of renewables. It comes back to the various Departments and people talking the talk. We need them to walk the walk. Farmers are prepared to do this but when they have an experience such as they did with miscanthus, it is hard to blame them for being sceptical about the future of renewables.
I understand their frustration. I thank the delegation for a worthwhile exchange of views. The IFA is more than welcome to attend meetings of the committee any time it considers it would be worthwhile from both our points of view. In the meantime, if it writes to us with any proposals or suggestions, it will give us a chance to examine them in order that when we speak with its representatives, we will have a positive answer, if we can get one. All committee members and I share the frustration of the delegates; there is much talk. We are trying to get everybody together and the only way we can see that happening is through the Department of the Taoiseach.
Transport is a growing problem for us also and nobody seems to be doing anything about it. We asked for targets to be set for CIE as a body. We could dramatically reduce emissions in transport in a relatively short period by providing for advance planning. In agriculture, forestry and energy we could develop an energy industry and become net exporters of electricity. In transport, without any great cost, we could eventually eliminate a fair percentage of our emissions. In agriculture we could develop new areas with potential for reduction without damaging the industry or its importance to the economy. If we took these steps, we could solve our problems. It needs to be driven, as it will not happen unless it is driven. Therefore, the more the committee meets the more we expose these matters in public and there is some chance that we make the necessary progress.
I thank the delegation. We look forward to meeting the delegates again in the not too distant future.
Mr. Padraig Walshe
I thank the Chairman. What is happening in Copenhagen next month is very important. I have no agenda to defend the United States but it was much criticised about the Kyoto Protocol deal. I have visited there on a number of occasions since and have watched what has been happening. Individual states and organisations in the United States do much more than individual organisations in Europe and they are well aware of what is happening in the world. However, the United States Government was not going to sign up to something on which it considered it could not deliver or that might damage the economy. It might be better if governments in Europe were more conscious of this and agreed to something real rather than having companies sign up to something about which they will never do anything. There is no point in this. I found there was awareness in the United States about climate change and our counterpart there, the National Farmers Union, runs an emissions trading scheme. Perhaps the level of awareness there is much greater at some levels than it is here.
I thank the committee for inviting us to come before it. We should keep in close contact.
I thank Mr. Walshe.
Will the IFA give us a note on the 3,000 acres of miscanthus and a broad outline of where it is grown? It would be nice to have information on it.
We can follow up on these matters.
Mr. Seán O’Leary
The vast majority of it was burned in power stations this year because there was nowhere else to go with it.
Perhaps we might have some information on that, on what farmers received for their produce and what they should have received. If we have information, we can follow up on it.
The joint committee adjourned at 6.05 p.m. until 2.30 p.m. on Tuesday, 25 November 2009.