Farm Ireland

Saturday 17 March 2018

Suckler subsidy would be 'unwise' warns agri economist

Prof Alan Matthews
Prof Alan Matthews
Louise Hogan

Louise Hogan

A €200/hd direct payment for the suckler cow herd would not be a "wise use of national resources" according to agri-sector economist Professor Alan Matthews.

The proposal if adopted could cost the national exchequer or Ireland's CAP envelope over €170m per annum.

Agriculture Minister Michael Creed has pointed out the funding required for such a payment equated to 18pc of the country's Basic Payment Scheme. Prof Matthews claimed the "cards were stacked" against it.

"The logic of committing further public funds to a sector which is already heavily supported by the national exchequer and the EU through CAP direct payments and tariff protections has to be questioned," said the emeritus professor of European agricultural policy at Dublin's Trinity College.

"I don't agree that providing more incentives can be in any way justified to an industry that is so heavily dependent for its scale on transfers both from consumers - through tariffs on cheaper Third Country beef imports - and CAP direct payments," he explained.

According to the 2016 National Farm Survey average direct payments to cattle rearing farms stood at €14,400. This accounted for 115pc of farm income, or suckler farmers were subsiding their enterprises to the tune of €1,900 on average from their direct payments.

Prof Matthews comments provoked an angry response from the IFA.

The association's livestock chairman, Angus Woods, said the thesis put forward by Professor Matthews was flawed and short-sighted.

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Mr Woods pointed out that the €3bn beef and livestock sector delivered essential economic output in every parish across the country, involving 100,000 farmers and up to 45,000 jobs outside the farm gate.

However, Prof Mathews insisted he was not against the beef industry per se, but he argued the current level of production was not sustainable.

He maintained that current beef cow numbers at around 865,000 head were historically and artificially high.

Prof Matthews pointed out that the introduction of milk quotas and the Beef Suckler Cow Scheme in the early 1980s drove beef cow numbers from 500,000 head to almost 1.2 million head. He claimed Ireland now needed to return to a herd of around 500,000 cows.

He said such a reduction in beef cow numbers - even allowing the increased dairy production - would necessitate the identification of alternative uses for grass. One possible outlet was growing grass for biogas production, he suggested.

John Gibbons of the heritage body An Taisce said the proposed payment was not justified on environmental grounds.

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