Darragh McCullough: 'Our beef sector was on thin ice long before the ink dried on any Mercosur deal'

Influence: the deal can help get countries like Brazil to buy into European standards on the environment
Influence: the deal can help get countries like Brazil to buy into European standards on the environment
Darragh McCullough

Darragh McCullough

After 20 years of scaremongering, the doomsday scenario of a Mercosur deal, complete with sacrificial calves, has arrived.

While the farm organisations publicly berate everyone from the Taoiseach to the EU Commissioner for Agriculture, privately they must be resigned to the fact that the horse has bolted on this agreement.

Leo Varadkar's comments are telling: he hasn't slated the deal. Instead he wants to run the numbers, and if the net result is a negative, he will vote against it.

However, even the most cursory calculation will show that Ireland stands to be a net beneficiary from the deal.

Tariffs of up to 35pc are to be slashed on our multi-billion-euro drinks and pharmaceutical exports, and there will be higher quotas for tax-free exports of Irish dairy products. That's before you get into the new business being opened up for the financial, IT and other services that now dominate the Irish economy.

In 2017 our beef exports accounted for less than half of 1pc of Irish exports. In the same year Ireland exported more computers than beef.

So I wouldn't be holding my breath on Leo's assessment conjuring up any good news for beef farmers.

Admittedly, the EU is guilty of sending beef farmers very mixed messages over the last month. On one hand they announce a €50m bailout to be dispersed among all of Ireland's beef farmers. In the next breath they unveil a deal that will surely be another nail in the suckler sector's coffin.

Get the latest news from the Farming Independent team 3 times a week.

But perspective is important here. The beef sector was on thin ice long before the ink dried on any Mercosur deal.

All ruminant systems face heavy investment requirements over the coming decade to dampen emissions. This will come in the form of more expensive slow-release fertilisers and slurry kit, along with requirements to reseed with clover and optimise grass utilisation and breeding data.

None of this is going to suit the part-time and loss-making suckler farmer that makes up a huge proportion of the sector at the moment.

Add in a Brexit wallop, and we would probably see a good chunk of these farmers head for the exit in a hurry.

But it's also misleading to claim that this will kill off Ireland's beef industry entirely. As long as dairying is profitable, there will be a supply of Irish beef.

This will be supplemented by some suckler beef from niche producers who are able to target super-premium prices.

It's also worth bearing in mind that any Mercosur deal is likely to take at least eight years before the full tariffs are eliminated. The blow will also be softened by a series of schemes feeding out of the €1bn compensation fund stitched into the agreement.

The one argument that might hold some sway is the shocking statistic that Brazil cleared an area the size of Leitrim in May to make way for cropping and pasture. That was just one month in one country, and shows the impact that incentivising South American farmers to produce more could have on the environment.

However, it can also be argued that the only way to get countries like Brazil to buy into European standards on the environment is by incentivising them to do so.

Granted, it will be nigh impossible to implement the same level of inspections on farms from Mayo to Mato Grosso, but the opportunity to access a market where prices are double is surely a powerful carrot to bring Brazilian ranchers into line?

The conversation hasn't moved on yet from the initial outpouring of fear and anger, but the next move is to figure out what are the options for suckler farmers looking for alternative ways to utilise their land, labour and facilities.

This may not be as daunting as some would have us believe. Remember that before milk quotas were introduced, there were less than half the number of suckler cows in Ireland compared to now.

Forestry is a bad word in some parts of the country but it doesn't have to be that way. For a start it doesn't need to be Sitka spruce, although that has been the norm up to now because it has returned the most for investors.

But there will be extra funding for alternative forestry systems like agro-forestry because it has been shown to be so beneficial for the environment.

The suckler men who are sworn against forestry or ever letting a black and white in the gate will need to be bit more imaginative.

Could pooling grass in anaerobic digestors run by co-ops be an option to turn Irish agriculture's greatest competitive advantage into valuable green energy?

Put it this way: it wouldn't take much for it to beat the returns from beef farming.

It might even leave a profit.

Indo Farming

For Stories Like This and More
Download the Free Farming Independent App