This is a timely debate. In the coming weeks we will be abolishing the dairy quota regime across the European Union in what is probably the most significant policy change in agriculture for the last 30 or 40 years. It will have a dramatic and positive impact on rural communities and the rural economy for the foreseeable future. Dairy expansion will also bring challenges but we have been preparing for them for some time. We will be providing family farms across the country, from west to east and north to south, with opportunities for sustainable expansion. Farmers will be able to grow their businesses and build on their potential for increasing milk output in a way that is very exciting.
Anybody who doubts the significance of the level of investment being made on the back of this opportunity should drive from Cork city towards Limerick. Driving into Mallow, one will see an investment by Glanbia worth €80 million. This is the biggest investment made in Mallow for many years. Further along the road to Limerick, a similarly large investment has been made in Charleville as part of a joint project between Kerry Group and Beingmate to project infant formula on the Cork-Limerick border. Again, this is the biggest investment that town has seen in many decades. Along the main Dublin road from Cork, Dairygold has invested €60 million in Mitchelstown on the back of dairy expansion. Glanbia has invested €180 million in Belview, County Kilkenny, in the largest ever investment by an indigenous Irish company, to prepare for what is going to happen to the Irish dairy industry starting in three weeks' time. Investments amounting to approximately €1 billion have been made in farms over the last four or five years in preparation for dairy expansion.
In respect of recent reports prepared in anticipation of the likely positive impact of these changes, County Cork is one of the only counties for which a specific report was produced on the impact of dairy expansion between now and 2020. In that county alone, 4,000 jobs and a capital investment of €1.2 billion are expected over the next five years. This is a big deal. For the last three or four years, we have been planning for these dramatic changes in European policy on dairy production. Ireland is going to take advantage of these changes.
Effectively, we have been operating within a straitjacket since 1984 owing to European policy on the volume of dairy we have been allowed to produce. That supply control policy was introduced for good reason at the time, but it is no longer relevant in the context of current global demand for dairy products. We are anticipating and planning for an increase of approximately 50% in volume over a five-year period. There is no other European country that is planning for more than a 15% or 20% volume increase in the same period. Ireland has the natural competitive advantage to take advantage of the opportunity in terms of our production systems, but we need to plan properly and work with farmers, co-ops and the dairy industry as a whole to ensure this is done in a way that protects standards, safety and quality and guarantees sustainability on the journey. I refer to financial sustainability for farmers to ensure they will not become overly indebted, sustainability in terms of the biodiversity that must be protected on farms and the management of the greenhouse gas emissions that will come from increased herd sizes farmers will be managing into the future. It is also about the sustainability of the fabric of rural Ireland which all Members hold valuable. That means protecting the family farm structure in Ireland which is the very heartbeat and fabric of rural communities.
There is no reason small and medium-sized family farms cannot benefit, as well as larger farms. That is why we have needed to plan to the extent that we have for the opportunity that will unfold in the next five to 15 years. We talk about the end game for the Food Harvest 2020 strategy as that is what was put in place by the previous Government, but 2020 is just a point in time. The dairy industry will continue to grow long after that date. It is reasonable to anticipate this. We will soon have figures as we are putting together a set of targets for 2025 which will be in place by the summer. Certainly, it is reasonable to assume that in the next ten to 15 years the dairy industry will double in terms of the volume it produces, but it may happen before then. When one considers what has happened in New Zealand, where the volume of milk produced has quadrupled in the past 30 years, one sees that while our target is ambitious, it is very achievable.
As a policy maker and Minister, the important thing for me is to ensure this happens in a way that is managed and controlled and anticipates all of the problems around price volatility, quality standards and opening new markets. We must plan for the challenges before they arise to make this as smooth a journey of growth and expansion as possible. For that reason, a number of my colleagues, particularly Deputies John Deasy and Michael Creed, have been speaking to me about the need to put a structure in place to monitor progress in the next five years. We are, therefore, going to establish a dairy forum which will be modelled in some ways on the beef forum, although it may be a little less adversarial. Its purpose will be to ensure all stakeholders interested in the expansion of the dairy industry, of whom there are many, are part of the discussion in monitoring progress year on year and month on month. The forum will meet either two or three times a year and I will chair it. I hope that after I leave this office, the Minister for Agriculture of the day will continue to chair the forum as the journey towards dairy expansion develops and delivers the positivity we can expect from the sector.
Nationally, we can conservatively predict that the next five years of dairy expansion will deliver approximately 10,000 new jobs in rural Ireland. This is not an overly ambitious target. We are talking about hundreds of millions, if not billions, in extra investment on the back of this in terms of growth. In a practical sense, we are talking about moving from producing about 5.5 billion litres of milk per year which is what we currently produce to producing close to 8 billion litres of milk per year. That is approximately an extra €1 billion of export value coming from the dairy sector in the next five years. This is an exciting period. It merits and is receiving the attention of all political parties and those interested in and concerned about the future of rural Ireland. It gives them an opportunity to speak and I am delighted that there are so many Members in the Chamber.
I will refer to some of the challenges we face rather than read a long script. I hope Members will raise concerns and questions which I may be able to answer at the end of the debate.
The theme of the Food Harvest strategy is smart, green growth in agriculture. That is as it should be. It is about doing things better and being more innovative than we have been to give farmers the tools, knowledge and skills set to be able to produce a product more profitably and sustainably than in the past. That is why we have seen the roll-out of a dairy sustainability scheme across dairy farms. I expect all 18,000 dairy farms in the country to sign up to the scheme. It will mean that they will be inviting an audit of their farms from a sustainability point of view to help them to build on their businesses in a successful way. We are also encouraging innovation and new ways of doing things through the new Common Agricultural Policy and the new rural development programmes. We are encouraging generational change as the ambition for growth and expansion we are delivering will not be fulfilled where only 6% of farmers are under 35 years of age, as they are. That needs to change and it is changing.
In the last budget we introduced tax changes to provide for a hugely comprehensive agri-tax policy. It includes 23 recommendations, primarily around changing attitudes to the leasing of land to move from a conacre to a long-term lease system. This is essential for dairy farmers if they are to expand and grow their land availability. One simply cannot build a dairy herd while leasing land for 11 or 12 month periods at a time, given the lack of certainty. Instead, we are incentivising in a way that anecdotal evidence suggests is working. Landowners, including those looking to retire from active farming, are now thinking about leasing their land on a five, seven or 15 year lease which will provide the level of certainty dairy farmers and others need to expand. They know that they will have access to land in the medium to long term which will assist them significantly in terms of expansion. Likewise, our treatment of land consolidation from a tax point of view is relevant. I refer to where a farmer sells one piece of land to buy another which is next to his or her farm in order that he or she can build better grazing management systems, which is of particular importance to dairy farms. This is about helping farmers to reorient their farms to facilitate opportunities for growth and expansion if they want to take them.
We have spent quite a lot of time and resources through Teagasc to ensure farmers have business plans for expansion and will not expand on a whim, making the assumption that because they move from 70 to 90 cows they will automatically make more money. It is not necessarily the case that they will. Where farmers move from having fewer than 100 cows to more than 100, they often must look at taking on someone to help with the extra work involved. This may involve a family farm paying a salary for the first time to someone from outside. It changes the economics of the entire farm. Expansion must take place on the back of a professionally put together business plan for growth that any business seeking to expand would put in place.
I have spent quite a lot of time talking to banks in Ireland about the facilitation of dairy expansion and the need for caution to ensure that we do not allow a new generation of dairy farmers in Ireland to get into significant debt which would essentially result in them working for the bank for most of their lives. This has happened in New Zealand and it was one of the big mistakes in that country's growth journey and which we are not going to replicate here. Even though farmers tell me that they would like easier access to money from banks, in actual fact, we need a banking system that is cautious in terms of how it lends to a sector that is planning to expand dramatically.
One aspect in which banks could improve, in my view, is the rate at which they lend money. Much of the available loan facilities provided to farmers in Ireland involves an interest repayment rate which is significantly higher than the rate for loan to farmers in other European countries. We need to examine this aspect and to ensure sufficient competition in the banking system.
Believe it or not, farmers represent 6% of the Irish workforce and last year, 23% of the value of bank loans were going to primary agriculture, to farmers. It is a case of 6% of the population getting nearly one quarter of the loan facilities currently being signed off by banks.
We have an appetite for growth and a farming community that is up for that. Between 70% and 80% of our farmers are planning for expansion and growth at different levels. The processing sector has invested heavily to make this happen and new pricing models are currently being developed so that we can hedge against the kind of price volatility of which there have been some examples in recent months. Most important, the Government and the sector have invested significantly over recent years, in markets both at home and abroad, to ensure that Ireland can avail of the extraordinary opportunities for expansion and growth that is really only available to Ireland in Europe, given the structure of agriculture in this country and the opportunity for dramatic sustainable dairy expansion over a relatively short period of time. The Government will continue to do everything possible to facilitate that expansion and to help to guide it. We will consult with all stakeholders to ensure we are all in this together and that we anticipate and solve problems together. If we do that, in my view, the next five to ten years will be an extraordinarily exciting period for the dairy sector in Ireland as it will be for many in rural Ireland who will be linked to this industry.
