Joint Committee on Agriculture, Food and the Marine díospóireacht -
Wednesday, 26 Apr 2023

Disparity in the Cost of Fertiliser: Discussion

An Cathaoirleach

Apologies have been received from Senator Paul Daly. We have received notification that Deputies Claire Kerrane and Johnny Mythen have joined the committee and that Deputies Matt Carthy and Martin Browne have left the committee. I welcome the new members and thank Deputies Carthy and Browne for their contribution and commitment to the committee. I can only read what is in front of me, Deputy Browne. You are not going to leave us as easy as that, Martin.

I remind members, witnesses and people in the Public Gallery to turn off their mobile phones. All present in the committee room are asked to exercise personally responsibility to protect themselves and others from the risk of contracting Covid.

Before we begin, I bring to the attention of those present that witnesses giving evidence within the parliamentary precincts are protected by absolute privilege in respect of the evidence they give to a committee. This means witnesses have a full defence in any defamation action arising out of anything said at a committee meeting. However, witnesses are expected not to abuse this privilege and may be directed by the Chair to cease giving evidence on an issue. Witnesses should follow the direction of the Chair in this regard. They are reminded of the long-standing parliamentary practice to the effect that, within reason, no adverse commentary should be made against an identifiable third person or entity. Witnesses giving evidence from a location outside the parliamentary precincts are asked to note they may not benefit from the same level of immunity from legal proceedings as do witnesses giving evidence within the parliamentary precincts and may consider it appropriate to take legal advice on this matter. The privilege against defamation does not apply to publications by witnesses outside the proceedings held by the committee of any matters arising from the proceedings.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment, criticise or make charges against either a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. Parliamentary privilege is considered to apply to utterances of members participating online from within the parliamentary precincts. There can be no assurance regarding participation online from outside the parliamentary precincts and members should be mindful of this when they are contributing.

The purpose of today's meeting is to undertake an examination of the disparity in costs of fertiliser. The committee will hear from representatives from the Irish Farmers Association, IFA, Mr. Brian Rushe, deputy president, Mr. Karol Kissane, farm business policy executive, IFA, and Dr. Max Potterton, grain policy executive; from Macra na Feirme, Mr. John Keane, president, Ms Elaine Houlihan, president elect and Dr. Liam Hanrahan, national agricultural affairs chairperson; Irish Creamery and Milk Suppliers Association, ISMSA, Mr. Pat McCormack, president, and Mr. John Enright, general secretary; from the Irish Cattle and Sheep Farmers Association, Mr. Eddie Punch, general secretary and Mr. Dan Lynam, delegate to national fodder and food security committee; and joining us remotely from the Irish Natura and Hill Farmers Association, INHFA are Mr. Vincent Roddy, national president, Mr. Liam Lavelle, Mayo national council representative and Mr. Tomas O'Toole, Galway national council representative. Their opening statements are being taken as read.

I ask the representatives of each group to make five-minute opening remarks. I call on Mr. Rushe.

Mr. Brian Rushe

I thank the Cathaoirleach for the invitation to speak to the committee. I am joined by Mr. Karol Kissane and Mr. Max Potterton. In 2021, according to the most recent statistics we have, fertiliser accounted for 16% of direct costs across all farms and sectors, but in the tillage sector, it accounted for 30% of direct costs. Last year, €1.2 billion was spent on fertiliser by Irish farmers, which is up €600 million on 2021. Since its peak, the price of gas has come down 80% to where it is today. In the same period, fertiliser in the UK has come down 50% and fertiliser in France has reduced by the same amount, but in Ireland, it has only reduced by 10%. I will reiterate that since gas prices peaked, they have come down 80%. The price of fertiliser in the UK and Europe has reduced by 50%, but in Ireland, it has only reduced by 10%. This week, there is €130 of a difference in the price of calcium ammonium nitrate, CAN, between the north west and the south west of the country. Thus, there are also massive regional disparities. Earlier in the spring, there was a difference of between €250 and €300 between Northern Ireland and the South.

Mr. Pat McCormack

I will reiterate a few critical points. Fertiliser is an essential product to deliver sufficient grass and crops, which contribute substantially to the €14.4 billion agrifood export industry predominantly located in rural Ireland. According to the Central Statistics Office, CSO, €1.208 billion of fertiliser was purchased in 2022, which is double where it was in 2021 and volumes sales were down almost 20%. Based on the national farm survey in 2021, dairy farmers spent just over €15,000 on fertiliser. Based on these figures, the average dairy farmer purchased €44,000 worth of fertiliser in 2022.

We are all aware that 14 or 15 months ago, the war started in Ukraine. We saw a significant increase in gas prices, which was swiftly followed by a cessation of quotations for fertiliser. Some five, six or seven days later, that same fertiliser was worth substantially more. This is a considerable issue. It was an issue then and still needs to be resolved. We have seen gas prices decrease steadily and it is unfortunate that fertiliser has not followed suit, especially in Ireland. We have seen other commodity prices, including milk, fall with unprecedented rapidity over the past number of months, but not fertiliser prices. In the UK, the equivalent urea can be bought for €530 per tonne and, indeed, can be bought in other European countries at €500 per tonne. However, in the Republic of Ireland, a farmer has to pay almost 50% more at this point in time. Our national council did a survey of our membership. It is fair to say those who were nearest to competition, were best placed to get a competitive quote for their fertiliser. By that I mean the nearer a farmer was to the Border with Northern Ireland, the more competitively fertiliser was priced.

I alluded to milk prices having dropped substantially in the past few months. We have seen 16 cent come off the litre. Farmers are receiving less for their product than they were 12 months ago. Fertiliser prices are in a market where they should have been reducing substantially and the industry needs to explain why that has not happened. I do not mean to be the prophet of doom and gloom, but we will see farmer margin eroded in the coming months, with input costs as they are. What we wish to see out of today is the Competition and Consumer Protection Commission, CCPC, carry out an investigation into fertiliser prices in the spring of 2023 and publish a report with recommendations by the end of June. The commission should also look at what happened, especially in March 2022, to fertiliser prices.

The fertiliser register should require sellers of fertiliser to record the price charged to farmers and statistics published on an annual basis. We see it happen in various other sectors. There is considerable regulation on farmers, but this would be a positive move. The EU should introduce greater transparency in the fertiliser market, including the compulsory reporting of imported and production prices and prices along the fertiliser supply chain until we see who the main beneficiaries are. We saw some links in the industry in 2022 increase their profits and margins by 300%. The unjust exclusion of dairy farmers from the 2023 fodder scheme should be reversed immediately, given where milk prices are. Their exclusion in 2022 is unforgivable. The EU needs a long-term strategy to reduce its dependence on importation of fertiliser and, in particular, our dependence on Russian imports.

Mr. Dan Lynam

We in the Irish Cattle and Sheep Farmers Association, ICSA, are concerned at the 2023 cost of fertiliser for cattle and sheep farmers. Fertiliser is not affordable at the current cost. While the cost of natural gas rocketed in August 2022, it has collapsed to a ten-year low. The cost of fertiliser has not come down to the same level. As has been said before, one could see €300 per tonne of a difference between England and Ireland a few months ago. Even in today's prices in the north west, from a small supplier to a big co-operative, €100 per tonne of a difference was seen this week. We are also concerned about the liming subsidy. It is not enough. There is €8 million of a subsidy for 25,000 applicants. This equates to just 20 tonnes per farmer, if everyone applied for the subsidy. Twenty tonnes of lime is not enough for the big companies. First, lime from the North should be allowed in. Second, a man will not come to spread 20 tonnes of lime with his whole outfit. He will not wish to do so. A farmer would want to have 50 or 60 tonnes. The subsidy needs to be looked at.

Mr. John Keane

I apologise for being late this afternoon.

An Cathaoirleach

Mr. Keane was busy. We will forgive him.

Mr. John Keane

I thank the Cathaoirleach. I am joined by my colleague, our national agricultural affairs chairperson, Dr. Liam Hanrahan. I thank the Cathaoirleach for the invitation to address the committee on the cost of fertiliser. We have a number of points we wish to bring forward for the committee to consider and discuss. First, as outlined by a number of other organisations this evening, I outline the importance of fertiliser to the sustainability of our sector and not just our grassland, but our tillage sectors too. Our climate gives us a distinct advantage in producing crops in an effective and sustainable manner. It also gives us the ability go grow in long seasons and utilise the best potential of the growing conditions we have in Ireland. As a result of the importance fertiliser plays within our sectors, a large proportion of the costs across all livestock and tillage farms, is made within fertiliser costs. As highlighted already, the costs on Irish dairy farmers exceeded €15,000 and the costs on tillage farmers tripled between 2021 and 2022. The profitability effect on many of these farms, be they livestock or tillage farms, was eroded in many circumstances where farmers forward bought expensive produce in on the advice of national bodies and, therefore, bore the brunt on the costs over winter 2022 and into spring 2023.

We believe the committee should investigate further the ability to source fertiliser. In early 2022, there was a cessation of availability of nutrients to farmers on three occasions by our large suppliers in the market. There were fluctuations in price of fertilisers in the course of weeks and days of up €150 to €200 per tonne when markets reopened. At the time of the high prices experienced in 2022, the feedback given in the sector was that replacement cost was the reason fertilisers were prohibitively expensive. However, in 2023 when we saw the reduction of gas prices across the European Union, we did not see the same reduction in the cost of fertiliser as the replacement cost tumbled.

We see great price disparity in fertiliser not just in the North and South of Ireland, but also in England and the EU. We have been informed by the industry that the supply of fertiliser in England and the EU is very different to Ireland but we wonder about this from speaking to colleagues in European Council of Young Farmers, CEJA. and across the EU who work on similar supply patterns to us. The extraordinary price rises from €300 per tonne for CAN and urea-based products in 2021 to a peak of €1,200 and almost €1,300 at various stages during 2022 needs to be investigated, specifically in the context of record profits recorded by these industries. CSO data show an almost 500% increase in profit margins obtained by fertiliser companies on certain products. It is unacceptable that farmers should bear the brunt of the cost of these profit margins, especially when food production costs were so high.

Fertiliser prices so far in 2023 in comparison with 2022 have reduced but have a long way to go to return to 2021 levels. Gas prices are lower than 2021, when products based on urea and CAN were in the region of €250 to €300 per tonne. This requires a major investigation as soon as possible to identify the causes, outside of the cost of natural gas, in terms of supply of fertiliser.

The national fodder and food security committee has a role to play in advising farmers on securing fodder. In the second half of 2022, Macra proposed that a burden-sharing option be looked at in relation to securing fertiliser for our sectors. The national fodder and food security committee chairman has asked for this to be looked at in the coming months and we look forward to the results of this.

On behalf of Macra, I thank the Chairman and committee for their continued support of our organisation. As this will be my last time before the committee in this role, I thank it for its continued support. We look forward to members’ questions.

Mr. Vincent Roddy

We thank the Chair and committee for the opportunity to discuss this critical issue. It has agitated many of our members, as we have seen in calls to our office. Many of the points have been made and will be dealt with in questions so I will not get into too much detail on those. We concur with the points made by previous speakers.

We have seen since Putin’s invasion of Ukraine in February 2022 a 123% increase in fertiliser prices from 2021. Initially, farmers were pragmatic about this. They recognised the implications for fertiliser and supply. Unfortunately, they seem to think suppliers of fertiliser have miscalculated. Farmers moved from acceptance to, later last year and into this year, understandable annoyance at the disparity in prices both inside Ireland and across the Border in Northern Ireland. You are looking at a €200-plus price disparity there. The view among most farmers is that a high level of profit has been made by other players at their expense. This was done in 2022 when a good deal of fertiliser was bought into the country long before Putin invaded Ukraine and, many farmers believe, was sold at an inflated price. They used fear to drive that. This year, the view is farmers will not be caught. There is no sympathy for the view that fertiliser was brought into Ireland at inflated prices and farmers will have to pay for the mistakes of someone else. Likewise, farmers will not be bounced into buying fertiliser on the basis there may be supply challenges down the line. We believe farmers would rather risk the shortage of fertiliser in the marketplace than get burned again on price.

For those involved in supplying fertiliser, there needs to be a realisation that the price needs to come down and if there is a cost to that, the companies and suppliers will need to take that from the profits we maintain they made in 2022.

Farmers are quite agitated about this and I am sure we will hear that as we go through the discussion. The price of fertiliser has fallen and continues to fall on international markets and that needs to be reflected in the price in Ireland. I look forward to members’ questions and thank our team here. Mr. Liam Lavelle and Mr. Tomas O’Toole will be taking questions with me. I wish Mr. Keane the best of luck in his role when he finishes up as Macra president.

Deputy Michael Collins

I welcome the farm organisations before us. We know the massive price differences that exist. We are talking about the difference between the UK and Ireland but there was a pretty big difference within Ireland on the Republic side of it, in respect of the farmers of Cork South-West anyway. They let me know in no uncertain terms they were being asked to pay incredible prices in comparison to places like Kildare. It was shocking earlier in the year. Things have levelled out some bit, which is most welcome. We talk of blaming the war but prices were on the rise in 2021. I did not know if it is altogether the war we can point the finger at. The prices of fuel have gone down. Urea in the UK costs €529 per tonne; in Ireland it cost €800 to €850 and is now down to €650. It is still dearer. Why is that? We need transparency. Farmers need to know. Dairy farmers are struggling, as well as suckler and sheep farmers. They need to know what is going on in terms of margins, price gouging, unfair practices and the profits being made.

Do the organisations agree with the Minister when it looks like he does not intend to investigate what is going on in the fertiliser market? Do they think the consumer protection agency should carry out an investigation? The astonishing price differences are unfair. I was talking to a lady on the phone a while ago. She said her son is out all night. He has two young children. He is working – pardon my language – his butt off and struggling to survive as a dairy farmer. She has serious concerns about her son who is married with young kids. He is working all the hour God sends and very little profit is to be made after all that work. Fertiliser at current prices is putting extra stress and strain. It was savage last year. This year, there are a lot of unfair differences and I do not think the Minister is right to walk away from this. I think the consumer protection agency should investigate this. What are the witnesses’ thoughts?

An Cathaoirleach

We have to suspend for a vote in the Dáil. We will resume after the vote.

Sitting suspended at 5.59 p.m. and resumed at 6.24 p.m.

An Cathaoirleach

Would the witnesses like to answer Deputy Collins's questions?

Mr. Brian Rushe

The first question was on whether the Minister should investigate the price disparity. The answer is "Yes", given some of the statistics we have found on the difference in prices between North and South, between the UK and Ireland and even between some of the regions. The figure that sticks out for me is the peak gas price. Since its peak, it has reduced by 80%. In the UK, the price of fertiliser has decreased by 50% in the same period. It looks to be the same in France. In Ireland, it has only decreased by 10%. That is massive.

I will cite a couple of figures from the CSO. In February 2023, a tonne of urea cost approximately €905 in Ireland. According to statistics from the Agriculture and Horticulture Development Board, AHDB, in the UK, the same product cost €589 there at that time. That is a large disparity. UK imports urea just like we do. As such, there is undoubtedly an issue and the Minister and Department should be investigating it.

The Deputy's second question was on whether there was a role for the Competition and Consumer Protection Commission, CCPC. It regularly deals with issues to do with the cost of food, insurance and so on, but it would also seem to have a role to play in examining wholesale prices for farmers as well as for other sectors.

Mr. Pat McCormack

I thank the Deputy for his question and for his acknowledgement of the fact that dairy farmers are under a significant price squeeze. I hope that leads to his support for calling for dairy farmers to be part of the fodder scheme.

I will take the Deputy's questions together. Mr. Rushe alluded to the differences in fertiliser prices and discussed whether the CCPC should investigate the 2023 figures. We need to examine the 2022 figures as well. We saw private entities and, in particular, co-ops closing for quotations on a Tuesday and opening on the following Monday with no inward movement of stock yet a significant upward movement in price. There was certainly a degree of jumping on the bandwagon in that regard.

What is important is that, once the Minister or the CCPC or both make findings, there be action. We cannot afford to let cobwebs gather on this, given the potential for a recurrence. We are on the periphery of Europe and, as Mr. Keane mentioned, we are producing a niche product from grass. We are exposed to input costs. According to a newspaper headline this week, we are the most expensive country in Europe for electricity. We need not confine this examination to fertiliser, as a number of inputs need to be investigated, given the escalation of prices when the price of gas increased and an absence of significant and timely reductions when its price decreased.

Mr. Eddie Punch

Something that the ICSA has repeatedly mentioned at various Oireachtas meetings in recent years is how farmers are scrutinised in minute detail, be that through aerial monitoring every five days or inspections at various levels. When it comes to bigger business, though, there seems to be no appetite in Brussels or Dublin for anywhere near the same level of scrutiny or transparency. When we get some progress, it seems to come years down the line and begrudgingly. This is not acceptable.

Some of the other witnesses alluded to the difference in fertiliser prices between the UK and Ireland. I would point to April 2022, when the UK price for urea was €1,065 and the Irish price was €1,157, a gap of €92.

After April 2022, the urea price steadily came down in the UK. It went below €1,000 per tonne in May and gradually came down bit by bit, month by month. In Ireland, urea stayed above €1,000 per tonne. Those are Central Statistics Office, CSO, statistics, not pick and match figures. As the year progressed, it became less significant but it became very significant again at the start of this year, when urea is in demand. We found we were still up against high prices for urea, in the high 900s. The UK started out with a big drop in urea price in 2023, down to about €657 per tonne. By March, it was down €529 per tonne. A lot of urea was bought by farmers at the time they needed it for approximately €900 per tonne. It is now down at €650 per tonne but it is a bit late in the day. Similar figures can be produced, which are in our submission, for potash and similar comments can be made about compounds. This bolsters the argument that greater transparency is needed around this market. The Competition and Consumer Protection Commission should examine how the price of urea was kept so high in this country when the international market said otherwise. It is not just natural gas. Natural gas peaked in August 2022 at $9.75 per million British thermal units, Btu, and rapidly fell after that. Now, in 2023, it is $2.40 per Btu. The natural gas price is at a ten-year low. When it was very high last year, there was some cutback in production in Europe because of the costs, which perhaps explains some of the issues in 2022. That is all over now and there should be full productivity. More transparency is needed around that. A key point is that farmers are being given conflicting messages and we do not seem to be any good sense of where the trade is going. Many farmers bought fertiliser in the back end of 2022 because they got signals that it would not even be available in 2023. They paid way too much for it to store it in their yards and they have lost substantial money on it.

Another factor which should be brought into the equation is that the EU has been slow to tackle the fertiliser issue. There was some disappointing beating around the bush in 2022. There is a sense that fertiliser is almost a dirty word in the new Green Deal. There must be a balance between food security, productivity and so on. The demand for the liming subsidy, with 25,000 farmers, is evidence that farmers are committed to the sustainability agenda. I wish to state that. The EU, in December 2022, finally suspended import tariffs on urea and ammonium, except from Russia and Belarus, but that is okay, which were 6.5% and 5.5%, respectively. All of these things tell us we should have been getting fertiliser for substantially less in spring this year. It is almost too late now. It must be investigated. There should be transparency in big business as well as around what farmers do.

Mr. John Keane

I think most of the points have been covered. We feel it is important that the Minister and the Department investigate this matter. As mentioned in the opening remarks, there is a disparity between North and South, Ireland and the Continent and Ireland and England, and there was the rate of change that happened in a short number of days, particularly in spring 2022, where at close of sales in different places on two different occasions there was a couple of hundred euro of an increase in the space of three or four working days. It is important to establish the cause and effect and the reality and impact for farmers. The upstream supply chain to farmers lacks transparency and clarity in this regard. The downstream supply chain from farmers after the product leaves the farm gate also has a significant lack of clarity and transparency, yet we know what goes on inside the farm gate down to the full stop, the dotted "i" and crossed "t". The office for fairness and transparency is to be established to examine the downstream and some upstream effect. The farmer in the middle being squeezed by the lack of clarity on both sides really highlights the lack of investment, intention and ambition to try to support that squeezed middle. We support a one-off investigation but there needs to be a more all-encompassing approach to ensure the clarity farmers bring to what goes on inside the farm gate is echoed in all aspects of inputs, both the upstream supply to farmers and the downstream.

Mr. Vincent Roddy

Most of this has been covered. Mr. Keane, Mr. Punch and the last two speakers made an excellent point about the impact on farmers, the compliance levels they must adhere to and that those compliance levels do not seem to be enacted in other parts of the supply chain. The Competition and Consumer Protection Commission is probably the place for that. Deputy Collins and others may be better placed to assess that. We would definitely support it. If it is to be done, at what point do we start? We need to go back to 2021 at the least and probably before that. The price is coming down, which I think everyone would acknowledge. I often think, if we did not have the Border - it is an awful thing to say - how much those prices would have come down. Even as prices come down, there are still significant differences. For example, last week, the average price for Cut Sward 24-2.5-10 worked out at approximately €700 or €750 a tonne. The equivalent, we understand, in Northern Ireland - it is hard to get an exact equivalent - 24-5-5, was able to sell in west County Mayo, delivered, at €630 per tonne. That is €120 of a difference. That is a clear discrepancy which does not help farmers. As Deputy Collins said, there does need to be an investigation into this.

Senator Victor Boyhan

I thank all of the witnesses here today. At the outset, I acknowledge the significance of Mr. Keane, the president of Macra na Feirme. He said it was his last day here. I thank him for his engagement with the committee. He has been highly impressive and an amazing exemplar in terms of being a representative for young people in agriculture and rural communities. That was demonstrated again by his amazing capacity to organise the march today and his ability to lead the organisation and the significant contribution he made to this committee over recent years. It has been valued, fresh and his given a new and very professional approach. I acknowledge that and send good wishes to Mr. Keane and the incoming president and team. Macra na Feirme is an exceptional organisation which has led from the front in a responsible and knowledge-based way which has been of great assistance to our committee.

On the general issue, we know that fertiliser represents a significant cost for most of the farmers who use it. Mr. Punch hit the nail on the head - the key word is "transparency". It is about openness and transparency, but it is a bit more than that. It is also about the whole of the European Union and the challenges for Ireland and EU member states in securing reliable imports of nutrients and fertilisers that are affordable and support sustainable farmers. Going back to Mr. Punch's contribution, there seems to be some suggestion, which is part of this concept around the Green Deal and the new Common Agricultural Policy, CAP, that fertiliser is somehow a dirty word - excuse the pun. We must ask ourselves how proactive are segments in our Government administration, what is the real issue and whether that in some way explains why this was not a top priority for Government, as it should have been. I suggest that is partly the case.

I thought Mr. Punch’s comments were thought provoking and on the money. I do believe there is a role for the Competition and Consumer Protection Commission. That is critical.

As for a fertiliser register, there are mixed views, although I do not have mixed views. There is an awful lot of regulation in agriculture. When you go on the land and walk and talk to farmers or meet them at marts, they complain about too much regulation. While we have to have regulation, controls, accountability and transparency, I am not convinced, although I would like to hear what our guests have to say. The ICMSA submission mentioned the idea of a fertiliser register in its five key points. It will involve another load of bureaucracy and monitoring. Is that what its members would be happy with? I would like to get greater clarity on that.

The IFA referred to the European Commission establishing an EU fertiliser market observatory, and Mr. Rushe confirmed that the association is going to be active in that. Invitations are open and there is a call for applications, and we know from communication with the Commission today that it expects to have this up and running by this summer. I am interested in hearing from the other representative groups. How familiar are they with this EU fertiliser market observatory? I think it is very positive but I do not know how much engagement there has been. There has been a call for submissions. Can the other groups confirm they are actively involved in that and have made submissions? There is a role in that. When we talk about viability and the production of fertiliser in the EU, the key factors have to be strategic autonomy and our food security. They are key aspects of all this. As I said, the IFA has explained it is going to be involved in all this and I welcome that, but I would be interested to hear general views on the EU fertiliser market observatory. There is a role for the European Union in securing reliable sources of fertiliser.

I thank our guests for their detailed submissions.

Mr. Brian Rushe

I might comment on the question about regulation before handing over to Mr. Kissane. I do not think any farmer would disagree that there is too much regulation in farming. To return to Mr. Punch’s point, there is a spotlight and magnifying glass on what farmers do every day regarding their inputs and everything they use, and we have to wonder whether other sectors of society and industry are under the same degree of pressure. Regulation introduced at farm level has a cost and that cost cannot be passed on by the farmer. It is absorbed into the system, which impacts on margins and hurts viability. If, in another part of the sector or supply chain, a cost is absorbed due to increased regulation, that actor has an opportunity to spread that cost across the supply chain, whether to the consumer or, in many cases, back to the farmer. There are times where, in the conversation about regulation and fertiliser being a dirty word, it is suggested farmers should do X, Y or Z and change to even more sustainable practices all the time. Farmers react to the market, to the consumer and to the regulatory environment in which they operate. At times, they have to introduce efficiencies, whether that relates to fertiliser or other input use, but many times those reactions are simply an attempt to stay alive in business, and farmers should not be afraid to say that. We absorb these regulatory challenges and additional costs, but we have no one to pass them on to.

Mr. Karol Kissane

On the market observatory, this was mentioned in our submission. I can confirm we are actively involved in what is happening with it at European Commission level. Twenty people are going to sit on it and the IFA has confirmed we will have a seat on it at European Commission level. I believe from communications I have seen that the first meeting is to happen in the last week of June and the plan is for it to meet twice a year. Like anything, it is all good and well setting up a committee like this and having meetings, but it will really be about the output and what will come from it. The idea is it will examine the production, prices and so on of fertiliser throughout the EU. When we were looking at this, we submitted to the Commission that not only did we need to monitor those aspects in the EU but, for us in Ireland because of what we discussed earlier in the context of the North of Ireland, also in the UK and to see what the prices are there. Realistically, the prices in the UK, whether in Northern Ireland or Britain, are probably a lot more relevant to us than even those in France, our closest EU neighbour, so we need to have the UK within the process. That is something we suggested to the Commission and it will be, we hope, taken on board in order that those prices can be taken in as well.

On the price side, we are working with COPA, the European farm body, to put some data together on prices bi-weekly throughout 2023 for a number of products. Perhaps the committee could help us in this regard. We really need the industry in Ireland, whether merchants, co-operatives or whatever, to engage and supply the average price at which they were selling these products in each bi-weekly period during the first six months of the year, so I hope the industry will come forward with those prices when requests go out to it. I am aware that many of us during the meeting have quoted the CSO figures. The CSO issues one or two pages to co-operatives and merchants to be filled in once a month giving the average price at which they have been selling over the month. I hope we can get hold of that information and supply it to the EU.

The observatory will probably be up and running by the middle of the year, but it is a question of what will come out of it. The ICMSA mentioned earlier the anti-dumping measures and the tariffs on urea coming into the EU being suspended at the moment, but they are only suspended. One thing we would call for is that in regard to Russia and Belarus, some action needs to be taken. For freedom of movement and to give some chance to EU farmers, that needs to be completely taken away to allow for fair competition for Irish farmers when they are buying fertiliser.

Mr. Pat McCormack

The Senator mentioned the Green Deal and fertiliser being a dirty word. The general perception throughout Europe and, indeed, the globe is that Irish dairy and beef are produced in one of the most efficient ways possible, and that level of production is aided and enhanced by the use of fertilisers. It is perceived as being a negative, but in the past four to five years, according to the Bord Bia audits, which concern all dairy farmers and a substantial number of beef farmers, our emissions per kilogramme of solids sold, whether beef or milk solids, are reducing. We are becoming more efficient and greener in what we do as every year and audit goes by.

On the issue of an EU fertiliser market observatory, we are involved through the European Milk Board, EMB. It is not confined to the Republic of Ireland and across the Border or across the Irish Sea. Our disadvantage when it comes to fertiliser goes right around Europe. My colleague Mr. Enright might take over there.

Mr. John Enright

On the issue of a fertiliser register, we are certainly not suggesting more regulation of farmers. I can assure the Senator of that. The fertiliser register is coming in and will record what farmers are purchasing, and we are saying we need to take advantage of the fertiliser register given it is coming in. At the moment, for example, meat plants are required to publish weekly the beef prices they pay to farmers. Why should we not compel the sellers of fertiliser to publish their prices weekly? It would allow us to know the price of fertiliser in Mayo, west Cork, Wexford or wherever. It would be a regulation not on farmers but on the suppliers of fertiliser, and that would be important with a view to getting real data. As our president mentioned, last March the suppliers stopped quoting and two weeks later, the price increased by €200, €300 or €400 a tonne. They are not going to record that voluntarily. Let us be straight about that.

On the observatory question, we are involved at the moment in a milk market observatory and a beef market observatory. They certainly have a role to play.

However, we find that while they have a certain level of data, when there is a problem they do not have the detailed data that we require. It goes down to the margins that have been taken by the different links in the supply chain. That is sadly absent in this, which is an aspect the Commission and our own Government continue to ignore. They can tell us everything about ourselves but when you go up or down the supply chain, we are told it is a commercially sensitive issue. That is the standard response you get. That needs to change.

An Cathaoirleach

We have to suspend. We have another vote in the Dáil.

Sitting suspended at 6.50 p.m. and resumed at 7.18 p.m.

An Cathaoirleach

We will resume in public session with Deputy Fitzmaurice.

Deputy Michael Fitzmaurice

I thank the Chair. The Agricultural and Food Supply Chain Bill 2022 is being taken in the Dáil. It is not great timing that the two things are on together.

First, I welcome the witnesses. The war in Ukraine began last year. We heard straight away that certain things could not come out from Russia, including certain ingredients for making fertiliser. The war is still going on, but the price of fertiliser has come down. Have the witnesses got any inside information on what the reason is for that? Basically, everyone was hearing about the cost of oil, diesel, gas and everything going up but that the raw materials, to put it simply, were hard to get out of the certain places we needed them from, and in the volumes we needed. It seems to be case that they are able to get them from somewhere now.

The cost of gas, as they have pointed out, has come down. While we know that, from where did the raw materials that are making it less than half the price at present come out of?

By the way, I wish Mr. Keane luck. He noted it was his last meeting. He stated that he would look for the committee to investigate. I will be honest with him here. In the case of a farmer, Mr. Padraig Walshe of Kilkenny, God rest him, who was in here six or eight months ago or longer-----

An Cathaoirleach

Just before Christmas.

Deputy Michael Fitzmaurice

It was just before Christmas. We looked to see how we could help him and we were told clearly on the legal side of it that we have no investigative power. We need to be honest with the witnesses and build it up straight to them that, to be quite blunt about it, unless a Minister investigates, we will be ruled out of order. There is no point in leading them up the garden path.

In relation to fertiliser, there was a lot of fertiliser bought in at the back end of last year in places. In their opinion, what percentage was bought in? A lot of raw materials probably were bought in more a year ago or 18 months ago and they were here. Basically, there were a lot of stock and the stuff was not bought. In their opinion, are the materials that were here in stock that were not used last year being used? I suppose that raises a serious question. Were they inflated prices or is someone taking a massive hit at present on the prices that are shown?

It is interesting to see as well that there is fertiliser coming across the Border or coming from different parts. The Department has placed a stipulation on farmers that nearly makes them like an importer if they are to bring it in. I want to know their views on that. Are farmers aware that there are certain fertilisers coming out of certain parts that are not the same? One could buy 18-6-12 fertiliser in one part of the country and then buy it in another part of the country and it may not have the same make-up, even though it might be written on the bag. Are farmers aware of that?

Mr. Lynam talked about lime earlier on and my understanding is that two weeks before it closed, it was oversubscribed. I spoke to people in the Department and I understand that what was being done was that while they were not going to reduce the price, they were going to reduce the tonnage per farmer, although I am open to correction on that. Off the top of my head, €8 million of a budget was what was given. Given the amount of money there is at present, with the country having €8 billion or €10 billion extra, I am sure another €7 million or €8 million would not be hard to root out to make sure that people are covered in respect of the lime.

In the witnesses' opinion, what sort of a budget is required yearly? You can only throw on 2 tonne at a time to be prudent and if you do it for few years, you bring up the PH value of the soil. What sort of a budget would be required to give a proper liming programme to the farmers out there?

An Cathaoirleach

There is a series of questions. I call Mr. Rushe.

Mr. Brian Rushe

I thank the Chairman. The first question is whether I have any inside information in terms of the fertiliser market. Like many farmers, I bought fertiliser at the back end of the year and if I had that inside information, to put it quite simply I would not have bought any. Many farmers bought at the back end of last year. They bought it because they were fearful of supply. They played up with two risks in their head. The risk was that price could come back but the other risk was that they would not be able to get it. The decision many farmers made was that the risk of not getting it is a greater risk and they would secure it in their yards and have it anyway, in the knowledge that the soundings coming from the industry were that the price would not move much at all. That is where it was. The Deputy is quite right that when the war started, we had the big impact on import prices fairly quickly and farmers were fearful in terms of whether they would get it. They were not getting the product they wanted. This was farmers talking to themselves and even soundings coming from the sector as well. Farmers entered a market and secured what product they had because of the fear of not having it. There was, the committee will remember, the setting up of the fodder committee and even the tillage incentive scheme to try to secure feed.

If you look at what happened, however, by buying all that fertiliser farmers carried the risk for the sector. That is what happened there. The industry would not buy fertiliser and leave it sitting in yards and take the risk itself. It said to farmers or the noises came out to farmers that if they wanted to guarantee fertiliser for next year, they would have to buy it and take delivery. Farmers took the risk for the sector and now farmers are paying for that risk. Mr. Keane mentioned, and he is quite right, that in the interest of fairness, there should have been a burden-share around that because, to be clear, farmers are shouldering the complete burden of that now straight away.

The Deputy asked for an opinion about how much fertiliser was secured by farmers at the back end of the year. The answer to that is, I do not know only that, anecdotally, talking to other farmers, our members and even farmers in my discussion group, many farmers, particularly in the dairy sector and tillage sector, went out and secured a lot of fertiliser at the back end of last year. It has been sitting in yards and is only being used now. I am not sure of the statistics on what has been bought in the spring but I would imagine it is down quite a lot. It is only down because it was all bought at the back end of last year.

Deputy Fitzmaurice has a question in terms of the liming scheme and what sort of a budget would we think necessary. Not to put a figure on it, if you wanted a national liming scheme, it should be open to all farmers. It is my understanding now it is closed off to derogation farmers. It should not be closed off to derogation farmers. It should be open to all farmers. The money will not be massive. The Deputy quite rightly recognises where the State finds itself. To be honest, it should be open-ended because farmers will not spread. You could come away and limit it, as the Deputy said, to a 2-tonne per acre maximum because beyond that you are only doing harm, and backed up with soil samples and the most recent soil analysis. That would have been a simple way of doing it.

There is another couple of points there. I might pass on to Dr. Potterton and Mr. Kissane. I thank the Deputy for his question.

Dr. Max Potterton

I thank the Deputy for his question. I will come in on the fertiliser register question.

Farmers who import or bring fertiliser from Northern Ireland have to register as a fertiliser economic operator. At the last Oireachtas joint committee on the veterinary medicine-----

Deputy Michael Fitzmaurice

Will Dr. Potterton explain whether there more red tape to that, to put it simply?

Dr. Max Potterton

Simply, there is. Registering on the database appears relatively simple - you tick a box. In previous purchasing habits, there might have been relatively small amounts of farmers bringing it across the Border but there is obviously a significantly greater number this year due to reasons already discussed in terms of price. We would be concerned that farmers may forget to do that or not register as economic operators and be subject to sanction or penalties as a result, which would be disappointing as well. We have concerns in that regard.

In respect of different blends of nutrients, it is not something I have been aware of or come across at all.

On the tillage side-----

Deputy Michael Fitzmaurice

To be clear, there is different methodology of heading it up, not the nitrogen part but the phosphorus, P, and potassium, K.

Dr. Max Potterton

On the P and K, we quote everything in elemental terms, whereas in the UK phosphorus and potassium are quoted differently, as potassium chloride and phosphorus pentoxide are how it is expressed on the bag.

On the tillage, I can provide some anecdotal evidence from our national grain committee. Many tillage farmers purchased 30%, 40% or 50% of their fertiliser requirements for harvest 2023 in late 2022. This is now a difficult position because that fertiliser was bought at the top of the market, effectively at north of €800 a tonne, but green grain prices for harvest 2023 have declined by 30% to 40%. Therefore, if grain prices fall any further, margins could be extremely compromised and difficult. It is important to note that point.

Mr. Pat McCormack

I thank the Deputy for his questions. He quite rightly alluded to the war in Ukraine, the availability of raw materials last year and the hysteria that was created around that. At that time, and indeed in the previous autumn, we saw a very strong gas price, which was contributing to a slow but steady rise in the price of fertiliser in the autumn of 2021 right into February 2022. We then saw an escalation.

What percentage of fertiliser is bought? I would say on farm for the majority of the year it is somewhere around 15% or 20%. Various farmers have various levels of exposure. I was at an advisory meeting of a local co-op last week and the sales to the end of March were at one third of where they were last year. That is probably a two-stool or twin-tower approach, where, in March last year, there was a hysteria and a tractor and trailer was sent to town for every bit of fertiliser that could be bought. Whereas this year, there is a major stand-off as we await reality in the price of fertiliser.

The Deputy talked about old materials and co-ops and fertiliser manufacturers having old materials. In 2022, we saw some large fertiliser sales groupings shut their book for orders on a Tuesday and, by the following Monday, they had gone up €150 to €250 to €300, with no fertiliser deliveries taken in that period of time. There was money made out of fertiliser that was bought fairly right in the autumn of 2021 and into the spring of 2022. There was money made there in the March-April period.

The Deputy talked about, and it was alluded to by my colleagues to our right, the various different labelling and measuring methods for P and K in various other jurisdictions. If there is mislabelling within this jurisdiction, it needs to be brought to task. I would encourage the Minister and all those responsible for farmers getting what they order and require under a certain label to be proactive on that. That would be a serious breach of trust and commercial trading.

Deputy Michael Fitzmaurice

I will get back to Mr. McCormack on that bit. In fairness, if a person is importing fertiliser from somewhere else, they would have complied with their system of doing it. It is just that farmers need to know that there may be a difference. I am not saying and would never say that someone is mislabelling something, but just that farmers need to be aware. On nitrogen, you could be 100% perfect and sound. However, on the P and K, it is the system that is used and it is fully above board in the countries that it is being used in. It is just that people need to be aware of it.

Mr. Pat McCormack

To touch on the fertiliser register, it is a huge level of burden and responsibility for farmers into the future. They talk about a closing of inventory and fertiliser on farm on 15 September. Without the best predictions in the world, if Daisy, the old cow, happens to die on the 16th, you may find yourself overusing fertiliser between then and the end of December, even though you spread no chemical fertiliser, purely as a result of the demand out there on farm. To the Deputy’s point on the importation of fertiliser, it is anti-competitive. It does everything possible to add bureaucracy and reduce the chances of a farmer going across the Border to bring in fertiliser at a right price, which we can see in 2023 could be substantially less than what was available here in the January-February-March period.

Mr. Eddie Punch

The war shows the need for more transparency and the need for the Minister to be more proactive in investigating this whole market. In practice, there are two schools of thought. Obviously, Russia is a player in fertiliser at a global level. It is the second biggest in fertiliser production. It is a significant player in potash and in ammonia, which is needed for the manufacture of fertiliser in Europe. On the other hand, it is true to say as well that there are many places one can get fertiliser. It is manufactured in Europe. A lot of urea is brought out of north Africa. What seems to have happened is there was a big panic in markets around natural gas as soon as this war kicked off. Natural gas started going up until it reached $9.75 in August 2022. Some of the European manufacturers slowed down or limited production, because the cost of the gas was so high, to protect their own costs of production. However, somehow, they managed to come out on the correct side. I saw recently that the top nine world fertiliser producers are in line for $57 billion in profit between them. Things are going well in the fertiliser sector for those on the right side of this equation.

An Cathaoirleach

What figure did Mr. Punch use?

Mr. Eddie Punch

Some $57 billion for the world's top nine. It is in our document. The top nine fertiliser companies will earn $57 billion between them. There are examples of other companies that are active here that have had very profitable years as well.

Deputy Michael Fitzmaurice

What was their general-----

Mr. Eddie Punch

That seems to be one of their highest ever. I cannot give the Deputy chapter and verse going back over the years.

In other words, they managed the crisis. When natural gas was at its peak, they just stopped production. That impacted the availability of fertiliser and that was an issue right across Europe, in the United States and in South America. Every farmer in the world had a problem with their fertiliser in 2022. Not every farmer in the world is having a problem with their fertiliser in 2023 but we still have.

There is an outside world tuned into this and people think this is just farmers again. This is actually about the cost of food and food security. I mentioned earlier that the Commission’s reaction to this in 2022 was lethargic, to say the least. There was much talk about the need for soil health and alternatives to fertiliser – all green agenda kind of stuff, which is fine to a point. Every farmer wants to use as littler fertiliser as they can without sacrificing efficiencies. That is why farmers want this lime subsidy. On the other hand, it does not make any sense for a country like Ireland. In fact, Ireland, with the potential to have the highest cereal yield crops almost anywhere in the world, all things going well with weather and all of that, and with the potential to grow grass better than many other countries, we have a vested interest in optimising our competitive advantage in that. That is dependent on fertiliser being available to Irish farmers at a competitive price compared with other farmers in Europe or elsewhere in the world.

This is serious business. We can talk all we want about the switch to organic farming. That is part of the agenda and that is fine. The reality is we also have to have regard for food security and what the impact can be on the price of food to consumers. This is a consumer issue as well. Sri Lanka gave an example of that.

They thought they did not need fertiliser. All of these things have to be balanced. The fertiliser register is an additional burden on farmers. It speaks to what I said earlier. When we want to have more scrutiny and more regulation of farmers, we seem to find a way but the scrutiny at the other end of the food chain, supply chain or input chain is never quite as easy, which is a huge frustration to farmers.

Mr. John Keane

I thank Deputy Fitzmaurice for the questions. The first element relates to the availability from Russia, that being stopped overnight and the costs incurred. I should say that I sit on the national fodder and food security committee. Some of the information that came to us related to sourcing suppliers following the limited availability of Russian supplies last year. People sourcing fertiliser from Ireland had to move from their traditional supply routes to routes from Asia and North Africa. If one is not a player in those markets traditionally or has no loyalty built up in them and is coming in, fairly new to them, since we are a small importing nation, the reality is that we will not get the first boatload delivered to the country. That is the information we were given about why we had a scarcity, if the Deputy wants to call it that, and the price increase. We have the availability now because we have got to those markets, the boatloads are being filled, and we have access to those areas in North Africa and Asia too.

I accept the point about the committee and its inability to investigate. That is fair enough.

Regarding bought-in fertiliser purchases, this has arisen as part of the national fodder and food security committee. I am working off the top of my head on this because I did not bring my diary with me on the walk today. I can supply it afterwards if the Chair wants. Our understanding is that in the first quarter of 2023's fertiliser year, which is October, November and December of 2022, there was a 25% increase in fertiliser purchases but that quarter only represents 4% of annual sales. Not a huge volume of fertiliser was purchased compared with the annual amount for years gone by. We understand that the CSO data have to be compiled and the committee has asked for that. Anecdotally, hearing from farmers in January, we understand there was a significant increase in early January. We have been told by fertiliser companies that from the middle of February until a number of weeks ago, the amount of fertiliser being purchased was almost nil.

Deputy Fitzmaurice asked about the different types of fertiliser available in bags. We have heard the same. We have been told it is not necessarily a labelling issue and is more about the different standards that are applied in different regions where fertiliser is manufactured. We understand that is a particular legislative requirement in some of the new markets that we have accessed in the last years or since the war in Ukraine. I do not think it is anybody's fault in particular but there is a communication issue. Traditionally farmers would get an 18-6-12 bag. Work needs to be done on communication.

The last matter related to the liming programme. We are told there is an oversubscription. Some €8 million has been assigned to the scheme. It was stated that it would support 500,000 tonnes of lime, which is €16 a tonne. If one looks at the Teagasc annual soil sample results from 2022, they state that 39% of the soil samples that were taken had a pH of lower than 6.5, for purposes of lime requirement. To bring that soil pH back up, one would have to use 2 tonnes per acre. There are 4 million ha in the country after taking out the commonage. If one takes 39% of those 4 million ha, that gives 1.5 million ha. If one is adding 5 tonnes per hectare, that comes to 3 million tonnes, which is six times what is currently assigned at €16 per tonne.

Mr. Vincent Roddy

I thank Deputy Fitzmaurice. There were some good questions. Some have been covered, especially about the problem with the supply of fertiliser, Russia and so on. I can add specifics. The Deputy asked if prices were inflated or if someone has taken a massive hit. It is our view that farmers have continuously taken the hit. In 2023, that is definitely the case. If there is a hit, maybe we need to look at an investigation into this. I am not saying the committee itself would be in a position to do that but we should look at the Competition Authority or something like that or, as the Deputy said, the Minister can drive that investigation.

Regarding fertiliser coming from Northern Ireland and elsewhere, the Deputy is right that there is an issue, as Mr. Keane alluded to, with the labelling. It is compliant with labelling requirements in the country of origin but our understanding is that there are issues with phosphorous and potassium, P and K. The nitrogen is as is but, as I understand it, we are looking at lower P and K than we would see here. For 18-6-12, the 18 would be okay but the six and 12 would be lower. That is clearly something that farmers need to consider when they are buying. Fertiliser coming from Northern Ireland is required to be registered on the database. As long as it is not a deterrent to the farmers and those who are bringing it in, it is not an issue. If farmers have forgotten for some reason, one would hope there would not be a hard hit for those farmers. Maybe a yellow card or warning might be more appropriate than coming down hard.

There is a general point about fertiliser. One cannot underestimate this talk and how genuine it was. I am sure on some levels it was genuine. On other levels, there was talk about that fear of supply, which has driven prices and panic. As we outlined in our document, farmers at this stage would be more inclined to not buy fertiliser and to take a chance on it coming down than to buy fertiliser that is still expensive. Our concern is that there would be problems with a fodder shortage next winter. Let us hope not but the time and season is getting tighter at this stage.

Senator Boyhan asked about the overall fertiliser register earlier. Our understanding is that there is a measure in the new eco-scheme. The fertiliser register will be required under that. I am not saying we are happy about that but that I definitely think that will be a requirement. My colleague, Mr. Tomás O'Toole, from Galway might have a comment on that.

Mr. Tomás O'Toole

The only point I want to make regarding liming is that the Department of Agriculture, Food and the Marine sent guys out a couple of years ago to do nationwide soil-sampling. Results came back from that and all the farmers got a good, detailed report. One main point from it was that pH was low. It has been mentioned before that nationwide, many farmers were below a pH of 6.5. I do not think there should be a budget for the liming. Every farmer is restricted in how much they can put out per acre, otherwise there is no value in it. As was mentioned before, it is about 2 to 3 tonnes per year. If any genuine farmers were going to put out lime, they could only put out that amount per acre. With the push to move to organics, one thing that can be put out is lime. Many farmers have moved to organics in the last couple of years with the incentives that are there, which would hopefully help, and they are allowed to put out lime.

The liming programme is now over-subscribed and that will have an effect on the farmers who joined, including me. I have applied for the liming scheme and obviously I do not think I will get the amount of lime I have put in. That is what I wanted to put forward.

Deputy Martin Browne

I also want to be associated with the words that have been said since I joined the committee three years ago. It has been a pleasure to meet Mr. John Keane here and at different meetings outside the Oireachtas. Most of what we were going to ask has been answered at this stage and everybody agrees that while Russia's invasion of Ukraine did not help, prices were going up beforehand. Looking at prices in February 2022, there was only a €71 difference in price between the UK and Ireland in urea but 12 months later, the difference was €317. We appreciate gas prices rose and have started to come back down but surely we would expect the difference between both countries to have stayed more or less the same. There has suddenly been a massive jump and that really needs to be investigated. The merchants did not help either. Every one of the witnesses has said they got farmers to buy through fear. Could the Government or the Minister have done more at that stage to reassure farmers that it was not going to get as bad as what had been predicted?

The IFA proposed that the Competition and Consumer Protection Commission investigate this matter and the CCPC has indicated it may do so. Has it provided any reason that it is not a given when something like this happens that it would investigate what is actually going on in the sector? Each of the organisations has approached fertiliser merchants. What kind of feedback have they received from them on what we are discussing?

Mr. Brian Rushe

I will take the first question on what the Minister could have done. When the emergency fodder committee was first established a key proposal of ours in our meetings at the time was that a national inventory of fertiliser should have been taken. This goes back to the point we discussed around transparency because farmers, rather than being fed by and acting out of fear and uncertainty, would at least have had a better understanding of what was happening on the ground in terms of the real issues around supply. From a farmer's point of view, that is one thing that could have been done but was not done. It could have better informed farmers' decision-making, taking into consideration that we were the ones who carried all the risk. A national inventory could and should have been taken in order to get a firm handle on what was really going on. If we think back to that time, it was chaotic. Mr. McCormack mentioned that there was hysteria, and there definitely was. Farmers did not feed that hysteria but reacted to it because they had no choice. That is the one thing I would say. Mr. Kissane will respond to the Deputy's other question.

Mr. Karol Kissane

Deputy Browne asked a question about the merchants and whether they are giving us reasons for the inflated rate we see in Ireland compared with the UK. As the Deputy outlined, if one looks back 18 months to two years ago, there was not much of a difference in the price, for the want of a better way of putting it. There is a huge gap in price between the UK and Ireland now. I have not been given a direct answer but maybe some others have. From listening to and dealing with the merchants last year, as our colleagues in the ICMSA outlined, there was a gap last year when there was a huge jump in prices over a period of maybe a week or ten days after the war in Ukraine kicked off. We were told the reason there was such a big jump in the price was that fertiliser had to be priced at replacement cost. The merchants, who had purchased fertiliser at a cheap rate in autumn 2021 and imported into their yards, agreed to sell us that fertiliser in March 2022. They told us that the reason for the huge jump in price was that they had to replace it. Then we moved forward to this year and the position has flipped. This year, I agree the fertiliser was bought by merchants, what was not sold on to farmers, in the autumn of 2022 at a high rate. In March 2023, on the international markets or wherever we want to buy the fertiliser, the price has come down and instead of it being priced at a replacement rate, as it was last year when the price was on the way up, we are told it is being bought at the cost of purchase, which is a dear rate, and therefore the merchants have to sell it on at a dear rate. Again, this comes back to what Mr. Rushe said and many of us have spoken about, namely, the need for transparency.

The Deputy asked about the Minister and what really is needed. There needs to be some way that we as farmers can see what is happening with fertiliser so that we can look back and see at what price it is coming into the country and at what price it is being sold on to farmers and see the trends over a number of years. That would mean that when something similar to what happened this spring happens again, the raw data would be there and the merchants, co-operatives and importers could be challenged and we could say, "This is what was happening last year and this is how it applied." A better way of putting it is that the Irish Farmers' Journal studies showed that the profit per tonne last year was €250 per tonne whereas it previously averaged €50 per tonne. That is a fivefold increase in profits that merchants and co-operatives made from fertiliser. They made a huge profit on that because they priced it at replacement cost but this year it is at cost into their yards. We definitely need more information going forward to make sure this does not happen again.

Mr. Pat McCormack

I thank Deputy Browne for his question. To start where he and our colleagues in the IFA finished, there seems to have been a bit of gamesmanship by fertiliser suppliers. It was well covered that in 2022 it was all about the replacement value whereas today it is all about the buy-in value. The €200 increase in the margin on fertiliser came on the backs of distressed farmers who are very concerned about their ability to feed their animals. Teagasc carried out a survey at that time. We were and still are involved in the food fodder security committee that was established. It was very obvious in that committee that farmers across all sectors were concerned and there was a potential for a deficit in fodder supplies. Thankfully, we had a very favourable February this year, which helped farmers get stock out to grass early, although things cooled substantially after that. The fertiliser scheme introduced by the Minister should have been more inclusive and of greater value. The Deputy asked if the Minister could have done more. Without doubt, he could have done more through the fertiliser scheme. There are challenges out there. As we stated in our submission, the Competition and Consumer Protection Commission should carry out a full investigation into the position in the spring of 2023 and 2022 because what has happened this year is wrong. Farm families are being exploited and the risk or the cost associated with high fertiliser purchases is being passed on to them. Equally, when the market gazumped last year, the inflated prices were borne by farm families. We need to see that investigation and see results published before 1 July. We need the Minister to take action on this because there are people who are very much offside in this regard.

Mr. John Enright

A few of us have been around this table for a very long time and have gone from crisis to crisis. Probably one of the most abused words in those crises has been "transparency". Whether it is on the beef side, the dairy side or the fertiliser side, as it is now, we are all looking for transparency on that side. We need to deliver it. As someone mentioned earlier, the Central Statistics Office was able to publish the price farmers pay for fertiliser. Why can the CSO not publish the price merchants paid for fertiliser? I know we will hear the excuse that it is commercially sensitive but the price I paid for my fertiliser is also commercially sensitive. We could be here again in 12 months' time discussing some other crisis and we will talk about transparency but we really need to start delivering on that.

We must consider the volume of fertiliser coming into the country, the price at which it is coming into the country and the price at which it is being sold to farmers. We can keep talking and talking but we are going to repeat the same mistakes we have made for years unless we sit down and deliver at this stage.

Mr. Dan Lynam

I thank the Deputy. Most things have already been said but there is one point I noted from attending the food and fertiliser meeting last October. We were told we need to get all the members of the ICMSA to buy at least 30%. All the buyers and suppliers recommended that the farmers needed to go out and buy fertiliser when it was €1,000 per tonne. At a meeting earlier in April, they were told off for delivering that message. They then said that in May, there will be a scarcity of fertiliser and that farmers need to buy now. There are no boatloads ordered to come in and no fertiliser will arrive in May. That was said at that meeting. Some people here were at that meeting and heard that message. There must be some kind of inquiry into what is going on.

Mr. John Keane

I thank the Deputy for his questions and remarks. He asked if the Minister or Government could have done more. In our opinion, and as Mr. Rushe said, there was a need for a fertiliser inventory across farms, merchants and importers. At that time, the information was that there was a significant backlog in the availability of ships to bring fertiliser to us no matter where it was coming from. There were some container issues in China as a result of the pandemic and delivery times were considerably delayed. To Mr. Lynam's point, that is going to lead to delays in bulk fertiliser being delivered from April onwards. More could have been done to establish the factors at home that inhibited our ability to avail of fertiliser at certain times of year, given the fractured nature of the supply chain at the time. The Minister could have engaged in the inventory and could have engaged more to understand what the international markets looked like. I acknowledge we are a smaller player but the Minister should have inquired into why we thought we found it as difficult as we did to gain access to fertiliser.

The national fodder support scheme that was announced in 2022 was supporting our drystock and livestock farmers. The rationale that was put forward at the time for the exclusion of dairy farmers was the result of a Teagasc survey in respect of the fodder that was available on farms. That was the criterion used for that decision. We were told there was surplus feed available on farms for a certain cohort of our dairy farmers. That situation has changed now. Data presented to the national fodder and food security committee show that in certain regions of the country, there were no surpluses remaining coming into this year and that there could be considerable pressure and pinch points for next winter's fodder reserves. The question has to be asked that if the rationale for exclusion no longer stands, is there a case to be made for inclusion? That is a question we would like answered, given that the rationale was based on the fact there was a surplus on farms and that may no longer stand up to scrutiny.

In terms of feedback from merchants, the replacement cost, as everyone has mentioned, is one of the big issues. The shipping schedule is another. Other feedback we have received points to a lack of movement from farmers from mid-February until the end of March. To put that in perspective, I would ask if there was an expectation among importers and merchants in respect of the expensive stock, if that is what you want to call it, that farmers were going to bear the brunt of the high costs at the time and that replacement costs would then come in and reduce the cost of fertiliser. Is that a realistic expectation that the actors in the market can have? I do not think so.

Another piece that was suggested in recent committee meetings, as I mentioned earlier, was the pattern by which we buy fertiliser in Ireland. It is very much spring-based. It is a grass-based system that is very different from the rest of the EU. We are told, given our location relative to the market, that the situation is very different from that in the UK. The UK forward bought a significant proportion of its fertiliser demand before the end of the year.

I do not have any other feedback to offer. I thank the Deputy for the question.

Deputy Danny Healy-Rae

I am glad of the opportunity to contribute. I thank Mr. Keane for his excellent work and the fierce input he puts into his job. He has made an impression on committee members. He has come in here diligently. His has been a massive performance and I thank him for that.

All of us, especially the farmers, know what has happened over the past 18 months. Going back to October 2021, we all remember that the price of fertiliser started to increase. As we got closer to December, the boys came back from the co-ops with the news that it was probably going to be cheaper in the new year. Farmers traditionally buy a bit of fertiliser before the end of the year to keep their accounts right but at that stage many of them held off buying until January. The next thing was that the price was creeping up and up, and that was before the war in Ukraine. As we know, the war then started and the thing escalated. Then in March, when farmers really needed fertiliser and were going to buy some amount of it, they could not get it. It was not available in March. As Mr. Kissane has said, the co-ops had a store of fertiliser at the lower price, the 2021 price, before costs went up. They held onto it in March as the price went up and up. I raised the matter with the Taoiseach, who answered. He then came back to me with a letter. The spin he put on it was that the co-ops were ensuring they bought fertiliser near the end of 2022 so they would have a supply for the farmers. They did buy it dear at that time but they had bought it cheaper the year before.

I thank the North of Ireland and the UK for bringing down the cost of fertiliser to what it is today. Fertiliser has come down all the way to south Kerry. It is far cheaper to buy it in the North than what the cost would have been if the co-ops were let at it. The bigger co-ops are joined up together. There are only cents in the differences in the price of their fertiliser. That is a monopoly that should be investigated. I thank the UK and the North of Ireland for whatever decrease has happened. I have heard, as have many others, that smaller merchants are selling fertiliser cheaper than the bigger co-ops. The bigger co-ops are trying to stop the suppliers selling to them and to hold it back from them so they can sell at their own price. That is very unfair. We need action on this because farmers have been driven down through the ground by the co-ops over the past 12 months. There has been no fairness.

The co-operatives were supported over the years to become what they are now but many farmers are very disillusioned with what the co-operatives have done and continue to do. Why does the Government not ask questions? Why does the Minister not ask questions? Where is the consumer regulator? This has driven up inflation and the cost of food and is affecting the whole country. I have been here all day and have to ask the question because the co-operatives are getting more for the fertiliser. Does that mean the Government gets more tax from it?

An Cathaoirleach

There is no VAT on fertiliser.

Deputy Danny Healy-Rae

There is tax on their profits and there has to be an investigation. I concur with the witnesses and thank them for coming in. There has to be an investigation into this. What has happened is criminal because the co-ops bought in the fertiliser more cheaply in 2021 and got massive profits from it throughout last year. They should be brought to task for that. I stayed here all day because the main question I am being asked is what is happening and whether it will be allowed to continue. It cannot be allowed to continue because all farmers-----

An Cathaoirleach

Does Deputy Ring want to make a comment before we suspend for the vote in the Dáil?

Deputy Michael Ring

Yes. I listened to some of the debate but caught up on another meeting also. I will make one quick point. In this country the supermarkets, co-operatives and everybody else rip off the people at every opportunity they get. When Covid-19 arrived, everybody ran to the Government first and the Government bailed them out. When farmers and the country were under pressure I saw prices going up in the supermarkets when there was no need for them to go up. It was a rip-off. To be fair to farmers, I do not know how they have sustained the costs over the past number of years. I know prices have increased but, by God, costs have really increased for them. Something needs to be done with these co-operatives. They have to play fair. In the good days they want farmers and in the bad days they want them but they sometimes forget that when farmers are in difficulty they should support them. I would like to say more but we have to leave for a vote.

An Cathaoirleach

We have given this issue a fair airing. In my view, it is obvious that a cartel is operating here. I have watched fertiliser prices for a good few years at this stage and when milk prices were on the up fertiliser prices went up. The war in Ukraine obviously exacerbated the situation. The purchase price for fertiliser in this country is out of kilter. While Deputy Fitzmaurice and I agree, the committee does not have the power to launch an investigation into the matter. We will write to the Minister urging him to hold an investigation into the prices farmers are paying for raw materials.

I thank the witnesses for their contributions. The joint committee will meet in private at 3 p.m. next Wednesday, 3 May 2023. The next public meeting will take place at 5.30 p.m. on Wednesday, 3 May 2023, when we will discuss the biomethane renewable gas industry.

The joint committee adjourned at 8.14 p.m. until 5.30 p.m. on Wednesday, 3 May 2023.