I thank the Cathaoirleach and Members for the opportunity to outline the work my Department and its agencies have being doing to ensure the long-term environmental sustainability of Irish agriculture. The task of feeding the world while saving the planet, which sounds lofty but is a true reflection of the situation, is one of the greatest challenges facing this generation. Almost 900 million people do not have sufficient food right now, and the figure is doubled when we include the hidden hunger of nutrient deficiency. As the global population grows to 9 billion by 2050, the task of feeding everyone and ending the scourge of hunger will become all the more challenging.
It is not just a matter of growing numbers of people. As countries develop and more people move into what is considered the global middle class, they demand more variety and better food, more of the type of high-quality protein produced by Ireland, for example. The OECD says that this middle class will increase in number from 500 million today to around 3 billion by 2025.
For our agrifood sector, the opportunity from this growing food market is immense and so is the challenge, because we have to produce all this food while respecting the environmental limitations of the planet. It is not acceptable to sacrifice the future to the needs of the present by producing food in a way that degrades our soil and water, destroys our biodiversity or exacerbates climate change. It is clear that sustainable intensification of food production - producing more food while respecting and enhancing the environment - is the way forward.
Ireland has been a champion of this approach for several years in the European Union and internationally and I believe we are showing the way in how to do this in a practical way. My ambition is that we should be, and be seen to be, a clear global leader in sustainable food production. That is why I am here to briefly outline some of things we are doing to achieve this ambition and to seek the input of Senators.
In October the Taoiseach succeeded in persuading his colleagues in the European Council to adopt sustainable intensification as EU policy on agriculture and climate change. This was the culmination of years of work by my colleagues and me in government in seeking to persuade the Commission and other member states of the urgency of this issue and the appropriateness of this approach. I regard the European Council's statement as a very significant development, on which I hope future EU policy on agriculture and climate change - on agriculture and the environment generally - will be built. Ireland is also deeply engaged on this issue at international level. In the UN negotiations on climate change we have been one of the strongest advocates for a specific work programme on agriculture. What we are seeking at both EU and UN level is to develop a coherent approach to the twin challenges of climate change and food security, something sadly lacking up to now.
At national level, my Department is developing a low carbon transition and mitigation plan as set out under the Climate Action and Low Carbon Development Bill. This plan will take into account existing mitigation commitments and also outline a longer term view and seek to balance the objectives of allowing the food industry to grow so as to meet the food security challenges that face the world, as well as the need to meet future climate change ambitions. We are also preparing an agricultural adaptation plan which will seek to plan for the positive and negative impacts of climate change.
Emissions targets aside, Ireland must also meet stringent standards for water quality to meet our obligations under the water framework directive. Fortunately, Ireland has a favourable water quality status when compared to most other EU member states; however, there is little room for complacency in meeting the ambitious targets laid down in the directive. We face similar challenges in halting the loss of biodiversity.
Food Harvest 2020 set out a plan for smart green growth of the agrifood sector. The fourth annual progress report on the implementation of the strategy was produced earlier this year and outlines the many areas where progress has been made. Just two weeks ago I announced plans for a new agri-food strategy taking us to 2025, which I expect to be published next summer. Sustainability will again be at heart of this new strategy which will build on the very strong foundations laid in the implementation of the Food Harvest 2020 strategy.
The Origin Green sustainability programme is a key element of the implementation of the Food Harvest 2020 strategy. Since its launch in June 2012, it has been enthusiastically adopted by the food and drink sector in Ireland. As the first national programme of its kind to be rolled out anywhere in the world, it presents a major opportunity to differentiate Irish food and drink products from those of our competitors. At farm level, the beef and dairy sectors have fully established sustainability measures built into each inspection, which to date have covered more than 70,000 beef and dairy farms. Similar programmes will be rolled out over the course of 2015 for pigmeat, poultry, lamb, grain and horticultural production. More than 90% of all beef produced in Ireland is covered by the programme. In the first nine months of its roll-out to dairy farmers, over 40% have applied to join the programme. This rate of progress is expected to continue during the course of 2015. In essence, we can say we are now literally measuring the carbon footprint of beef herds at farm level using a carbon calculator internationally certified by the UK carbon trust. The broadening scope of the farm element of the programme to incorporate water, biodiversity and energy and socioeconomic information reflects the ongoing evolution of the programme to ensure it retains relevance and can help Ireland to achieve its goal of becoming a world leader in sustainable production.
In addition to the work done at farm level, more than 375 food and drink manufacturing companies have registered to participate in Origin Green, while almost 300 companies have signed up to the newly developed Origin Green online platform. The programme aims to have 75% of exports covered by members of Origin Green by the end of the year and by the end of 2015 it is anticipated that this figure will exceed 85%. Setting measurable and independently verifiable goals, it will enable us to achieve our ambition of seeing 100% of our food exports on the road to sustainability by 2016.
Ireland's water quality is favourable when compared to that in many other EU member states, with nitrate and phosphorus levels in water reducing in recent years. The EPA has identified a number of reasons for this reduction, including our implementation of the nitrates regulations. Earlier this year I worked closely with my former colleague, Phil Hogan, in reviewing these regulations to ensure the correct balance between supporting efficient farming and reducing nutrient loss from agriculture.
To support biodiversity, I introduced the Environmental Impact Assessment in Agriculture Regulations in 2011, designed to ensure environmental screening of certain agricultural developments at no cost to the farmer in supporting our biodiversity ambitions. More recently, my Department is supporting the rolling out of both the Kerry Life and Aran Life programmes aimed squarely at supporting biodiversity in these areas. Supporting biodiversity will be a key theme also within the forthcoming rural development programme which I will mention.
Together with high national standards for water quality, biodiversity and animal welfare, Ireland is rightly regarded as being among the most climate-efficient EU countries where food can be produced with least impact on the environment. This record of Irish agriculture in producing meat, dairy and other products with a low and improved carbon footprint is important to our credibility in persuading our colleagues in Europe to recognise the need for coherence in the European Union's food security and climate change objectives, as evidenced in the recent European Council conclusions to which I referred. In 2011 the European Commission's joint research centre published a study which confirmed that Ireland was a highly efficient food producer in terms of greenhouse gas emissions per unit of output. Senators can see the figures in the text of my speech, if they have received a copy. Research from Cranfield University in the United Kingdom, in conjunction with Bord Bia, shows that in a world in which fresh water is scarce Ireland has one of the lowest water stress measurements in the world, in other words, we can produce more food without having to worry about running out of water. This highlights the essential role of sound research to back up our claims about sustainability in Irish agriculture. We are supporting a range of research initiatives, at national and international level, on the many dimensions of sustainable agriculture.
In this regard, my Department has three competitive research funding programmes: Stimulus for agricultural production, FIRM for food production and COFORD for forestry research. Sustainability and resource efficiency were key themes in recent research awards under these programmes. As late as this morning, we launched the latest research programme in this area, which means that in the past three years we have made €85 million available for research on nutrition, sustainability and more efficient and better ways to produce food, while protecting the environment. This says a lot about the Government's commitment to the sector. While supporting research, I have also concentrated on converting it into real action on the ground and positive improvements at farm level. Initiatives include the carbon navigator tool, jointly developed by Teagasc and Bord Bia, which focuses on incentivising the adoption of best practices, allowing individual farmers to achieve greenhouse gas reductions and increase their efficiency. In October last year Teagasc launched a sustainability demonstration farm at Kildalton, where best practice in sustainable farming will be implemented, evaluated and shared. The project will be rolled out on a phased basis and plays an important role in training our next generation of farmers in the concept and practical aspects of agricultural sustainability. This research and implementation work, coupled with a comprehensive environmental impact study commissioned by my Department of Food Harvest 2020 and, most importantly, a thorough SWOT analysis, has helped to inform the policy strategies and design of several measures in our draft rural development programme which will take us to 2020.
I will set out the position on Common Agricultural Policy reform. The CAP has been a significant contributor to the environmental sustainability of the European agrifood sector in recent years and I was pleased, as chair of the European Council of Ministers, to have reached agreement on a new Common Agricultural Policy framework in June last year. Under the CAP, farmers will continue to enjoy significant supports but will have to comply with various requirements under cross-compliance measures, including statutory management requirements and the good agricultural and environmental condition provisions under Pillar 1. In addition they will have access to a range of enhanced and targeted agri-environmental measures under Pillar 2 of the CAP, the Rural Development Programme. I hope we will have these approved in the not too distant future.
Under Pillar 1, the newly reformed CAP provides additional opportunities to support sustainable food production. The focus on environmental protection has been strengthened, with the provision of a compulsory green direct payment under Pillar 1. This will account for approximately 30% of a farmer's total payment. In other words, if a farmer does not meet the requirements which are rather straightforward and easy to understand, he or she loses 30% of the single farm payment and is potentially liable for penalties also.
Environmental measures continue to be a strong feature of the draft rural development programme under Pillar 2 of the CAP. A key measure is the new green low-carbon agri-environment scheme, designed for 50,000 farmers at its peak in several years time. Financial incentives for farmers in implementing measures to support climate change, water quality and biodiversity ambitions will be available under the scheme. Additionally, support will be available for locally-led agri-environmental schemes that can be specifically targeted to meet local circumstances. Initially, this will include expanding the existing Burren farming for conservation scheme, but it will also include a completely new and targeted project aimed at conserving the freshwater pearl mussel, one of the most endangered species in Ireland.
The Rural Development Programme also includes measures on organic farming, areas of natural constraint and support for capital investments to address environmental objectives, for example, low emissions spreading equipment and manure storage. In addition, we will be supporting the establishment of knowledge transfer groups to optimise the environment for the transfer of the most up-to-date information on over 25,000 farms and the introduction of a cutting edge beef genomics scheme which will further improve the greenhouse gas intensity of beef production systems.
Some €4 billion in European and national funding has been earmarked for investment in the agrifood industry and the rural economy generally during the seven year lifetime of the new programme. However, the draft programme must be formally approved by the European Commission before it can be rolled out nationally. Securing this approval is an absolute priority for me and my Department.
The role forestry plays in contributing to climate change mitigation is often underestimated. That is why securing recognition of the role our forests play in carbon sequestration at EU level is so significant. I was pleased, therefore, when the European Council's conclusions in October specifically noted the role afforestation could play in carbon sequestration. This is important for Ireland as afforestation is a major greenhouse gas mitigation measure that we are undertaking on agricultural land. Under the proposed new forestry programmes it is aimed to plant 43,000 ha of new forest and build 690 km of new roads during the period 2015 to 2020. Management of these forests must adhere to the principles of sustainable forest management by addressing, in equal measure, the economic, social and environmental benefits forestry can deliver.
The initiatives I have outlined are covered in greater detail in a short paper for Senators. At this stage I hope everyone has received a copy, but, if not, it will be distributed presently. These initiatives will play an important role in underlying sustainable production systems in the future. Ongoing scientific research and investment in knowledge transfer leading to a high adoption rate of best practice at farm and processing level will be a critical success factor in striving towards our sustainable environmental goals. Recently, well informed international visitors, including the head of agriculture at the World Bank, have been impressed by what we are doing in the area of sustainable agriculture, but I am ambitious for us to do far more. Given our natural advantages and the quality of agricultural research, we should seek to be the global leader in sustainable food production. To say the least, this is not an easy task, but it is achievable. Achievement of the environmental ambitions of the water framework directive or delivery of the national biodiversity plan will be significant challenges, but we have done much already. Measures such as those included in the Rural Development Programme can continue to take us forward in a positive way.
I realise Senators were keen for me to speak briefly about dairy prices because it is a current issue. There has been much difficulty and friction in the past 12 months on the back of beef prices weakening. I am pleased to say things are now moving in the opposite direction and beef prices are strengthening. There is scarcity, prices are getting stronger and the measures agreed at the beef forum have brought greater transparency to the calculation of prices. This was helpful, in particular, from the point of view of farmers.
It appears that we are heading into a difficult six month period in the case of dairy prices. Teagasc expects an average dairy price next year of approximately 27 cent per litre, down from approximately 37 cent per litre in the past year. This is a major issue and it happens to be arising at the same time as we are planning for expansion and many dairy farmers are borrowing and making investments. The cost of production on a dairy farm will be somewhere between 25 cent to 28 cent per litre. When the price of milk falls to more or less the cost of production, major challenges arise. Dairy farmers receive the highest single farm payment of approximately €18,000 on average. Despite this, Teagasc has predicted that they could see a halving of their income next year, from an average of €64,000 this year down to approximately €34,000 next year. This prediction may not come true and we will have to wait and see what happens in the marketplace. There are things we can and will do to try to bring a balance to the market and have a floor for prices if they begin to fall rapidly in the coming weeks. The price in New Zealand is approximately 19 cent or 20 cent per litre for farmers. The price in Estonia, Latvia and Lithuania is approximately 21 cent per litre. In Ireland those farmers still producing milk are getting over 30 cent per litre.
We need to anticipate problems and plan. I have spoken in a serious way to all of the major banks in Ireland to discuss how they can support farmers in getting through what I regard as a temporary pricing issue. We need to work with Teagasc to ensure farmers manage their businesses and farm enterprises through a difficult period in minimising the costs of inputs and so on. Most important, we need to continue the conversation with the Commission, in particular, Ireland's Commissioner, to ensure it uses the tools available to try to bring a balance and stability to a market that will encounter difficulties in the coming months. These tools include aid to private storage which we are using effectively in the case of butter production. Ireland has used approximately 40% of what the European Union has paid out so far. This represents a significant and efficient use of the allocation. Another tool is export refunds. In other words, we could offload product outside the European Union cheaply and look to the Commission to make up the difference in price. This is an expensive option and one that is unpopular outside the European Union because it is seen as dumping on the markets of others and causing problems in them. I imagine the Commission would be slow to adopt this measure, although I can understand why many Irish co-operatives are keen to see export refunds in place in order that they could offload some of their product in storage.
The third tool available to the Commission is intervention pricing.
In other words, the Commission would buy product at a guaranteed minimum price level so as to put a floor under a falling price. It would store that product and then sell it in six or eight months time when the price had improved. We may well seek the use of that tool by the Commission, but it is too early to say so yet. In the next couple of weeks, we must monitor carefully what happens to dairy prices. Luckily, from the Irish perspective, most dairy farmers are drying off currently or have already dried off and we do not have anything like peak production of milk currently. However, this will become a serious issue for the broader sector when spring milk starts to come through. We also have product in storage that our co-ops must off-load and this is a concern.
One of the reasons for the difficulty is that the Russian market is closed. However, the primary reason is that for two years in a row there have been bumper harvests globally which have resulted in cheap grain, cheap feed barley and cheap maize. When we have cheap grain, it is only a matter of time before milk production increases dramatically, particularly in places like the United States and India. There has also been a very good grass growing season in New Zealand. We have seen higher increases in output than expected globally, but there has been a slight slowdown in the pace of increased consumption in China. As a result, there is more milk being produced than is being consumed. This will not be replicated every year, but we must learn to deal with this temporary problem. There are multiple ways of responding to this.
I wish to correct the record on something I said the last time I was in this House. I wish to correct a statement I made to the Seanad on 12 November when I contributed to a debate on matters relating to fisheries in regard to the importance of seeking to attract operators from other countries to land and process a greater proportion of the fish caught in Irish waters around Ireland. The record shows that I stated 1.2 billion tonnes of fish were caught in these waters. I do not remember saying this, but if I did, it was wrong. This was an error and what I meant to say was that the fishing opportunities in Irish waters have an estimated annual landed value of €1.2 billion - as opposed to a catch of 1.2 billion tonnes - and that this provides great potential for our coastal communities, particularly if we can attract more vessels to land and process fish in Ireland. In other words, only a relatively small proportion of the fish being caught around our coastline are being landed in our fisheries' harbours and we need to change that. I want to correct the record to ensure I am quoted accurately in the future in regard to that debate.
If Members have any questions or comments on today's statements, I am happy to try to respond to them.
