Farm Ireland
Independent.ie

Thursday 19 October 2017

The expansion of milk production in the west is set to be a key farming trend in the future

 

It will be easier to expand your farm in the west of Ireland
It will be easier to expand your farm in the west of Ireland
Claire Mc Cormack

Claire Mc Cormack

The expansion of dairying on a large scale in Connacht is set to be one of the big trends in agriculture over the next couple of decades, a leading agri economist has predicted.

With growing concerns over shortages in skilled farm labour and problems with land inequality set to increase, there will be significant structural changes in agriculture, says Dr Kevin Hanrahan, head of the Teagasc rural economy and development programme.

"Over the next 10-15 years, I think some of the Government and industry vision for the agricultural sector will be a change in the composition to be more dairy centred and somewhat less beef centred," he said.

"One of the things underlying that will be growth in the size of Irish dairy farms and that growth will come by dairy farms merging together, one dairy farm being taken over by another," he said.

Although most of the initial growth in dairy is occurring in traditional dairying pasturelands like Cork, Tipperary, Kilkenny and Waterford, Dr Hanrahan believes larger scale dairy opportunities will eventually be focused on western counties in 20-30 years time.

"At some point, it will become very difficult for farms in east Cork and Kilkenny to expand their operations in terms of dairying, and it will be easier to expand in the west of Ireland where there are dairy farms.

"Those farms will be able to access land more readily because the person they are competing with won't be another dairy farmer, it might be a drystock farmer," Dr Hanrahan said. He highlights the expansion of milk production in non-traditional dairy areas of New Zealand as an example of what could unfold here.

There are just over 17,500 dairy farmers in Ireland milking an average of 80 cows as part of a national herd size of 1.14 million cows.

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According to Teagasc's 'Road Map for Dairying' published last October, by 2025 dairy cow numbers are expected to increase to 1.7 million, while the average herd size will grow to over 100 cows. Average milk delivered per farm is predicted to increase to over 570,000 litres.

However, some analysts have warned that the sustainability of the family dairy farm will not be achieved exclusively through expansion and intensification of production.

Land inequality

A recent European Parliament study found that 3pc of farmers controlled 52pc of all farmland in the EU in 2013, with 76pc of farms having the use of only 11pc of land.

The report says this trend places the EU on a par with Brazil, Colombia and the Philippines for land inequality.

The EU report, though non-binding, recommends that governments give small and medium-sized local producers, new entrants and young farmers priority to buy and rent farmland.

It also recommends that land or rental contracts contain requirements for those buying it to engage in farming.

"As farms become larger, that inequality, in all likelihood, will increase," said Dr Hanrahan.

He says access to labour will be a constraint on the development of scale in dairy. "Some businesses will respond to those constraints by paying more for the labour, giving their employees better terms and conditions, in terms of hours worked and healthcare benefits.

"Others will respond by saying okay we'll invest in automated milking parlours so we'll substitute capital for labour," he said.

Environmental policy at a national and European level will also pose constraints on the future shape of the family farm.

James Kinsella, professor of Agricultural Extension and Rural Development at UCD, believes the future for the family farm can be safeguarded by policies which seek to create a large farm/global markets and smaller farms/local markets model.

"Ireland, with its existing profile of farm families, fits very well into a balance of these pathways but unfortunately our national policy and vision fails to reflect this.

"If we continue on our current single path of agricultural development exclusively through expansion in output and intensification, we run the danger of undermining our opportunity to maintain farm families as contributors to viable rural areas," he said.

Although farm diversification is expected to be adopted by some farms as a strategy to boost farm incomes, Dr Hanrahan says it's not necessarily the solution for everybody.

"I think there will be two trends - there will be farms that go down that route because it's in their interest, but there will also be many farms that become more specialised.

"Dairy farms, for example, are becoming increasingly specialised.

"Many of those farms may have had a beef enterprise in the past, and increasingly, they are shedding those enterprises to concentrate exclusively on milk production.

"Post quota, an extra litre of milk is going to make them some money over and above what extra beef is making them," he said.

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