Mr. Simon Coveney, T.D., Minister for Agriculture, Food and the Marine

Speaking Points

Mr. Simon Coveney, T.D., Minister for Agriculture, Food and the Marine

at the Agricultural Science Association Annual Conference 2012

“The Agenda for Sustainable Growth”

Friday, 14 September2012

at Druids Glen Hotel

Contents

Introductory RemarksPage 1

Agri-Food Overview and OutlookPage 2

Sustainability and Climate ChangePage 3

Agriculture and Climate ChangePage 5

Agriculture Production and the EnvironmentPage 8

ResearchPage 9

CAP ReformPage 10

Agri-Environment Options Scheme (AEOS)Page 12

BioenergyPage 13

Biodiversity Page 14

Environmental Impact StatementPage 15

Water QualityPage 15

Concluding RemarksPage 16

Introductory Remarks

Thank you for inviting me to speak to you this morning at the Annual Conference of the Agricultural Science Association. The theme of the conference – sustainable growth – is of critical importance to the future of agriculture in Ireland and world-wide.Food security, climate change, market volatility, extreme weather events, competition for land use and water scarcity are just some of the major challenges that are faced by governments, policy makers, scientists and researchers. All are challenges that serve to underscore the fact that, globally, our agricultural resources are finite and, in many cases, under severe pressure. For the next few minutes I propose to outline the context of the agri-food sector in Ireland and the initiatives my department is undertaking in relation to promoting and supporting sustainable growth in agriculture.

Agri-Food Overview & Outlook

Ireland’s experience in modernising and scaling up agriculture and related business and technology is a success story. The Irish agri-food sector is moving to realise its full potential.I am consistently struck and encouraged by the tremendous positivity around agriculture and the agri-food sector. There is a welcome and increasing realisation that the agri-food sector is one of those that will play a critical role in our economic recovery. It is one of these things at which this country excels and it is something on which we should concentrate and in which we should invest. We have an exciting story to tell – one full of enormous potential right across the various sectors.

Ireland’s economic recovery will be export-led and agriculture and the agri-food sector will play a key role in that recovery, in terms of both export generation and job creation.

This Government’s priority is job creation and putting in place the structures that will allow jobs to be created in the private sector. One of the main drivers for the Irish economy over the next five years will come from rural Ireland, in particular through the hundreds of indigenous food companies across the country.

The Government intends to drive a very ambitious growth agenda for the agri-food sector and to increase the value of exports from the sector to €12 billion by 2020. That means increasing the volume of food production in Ireland by a third over the next decade and adding value to our food production of 40 per cent. It is intended to increase milk production in volume terms by 50 per cent over that period.

The agri-food sector has performed strongly in recent years with exports reaching an estimated €8.84 billion in 2011. This represents an increase of almost €1 billion and follows a similarly encouraging result in 2010.

Exports in 2011 were 25% up on the levels recorded in 2009 boosted by high prices evident for most commodities and higher output in the dairy, beverages and pigmeat sectors.

The medium to longer term prospects for the sector are also bright, with the FAO/OECD indicating a generally positive global agricultural outlook up to 2020, helped by projected increases in global food demand.

In the medium term, global beef supplies are expected to tighten further, while the ending of milk quotas in 2015 offers a very significant opportunity for major expansion in that sector. This has resulted in a tangible sense of optimism at both farm and industry level with a strong buy-in to the Food Harvest 2020 strategy.

However we are still in a global economic crisis. World commodity prices can fluctuate wildly as recent experience has shown. Economic downturns in key markets can affect our exports and so can changes in exchange rates. Our farmers are also challenged by high input prices and the challenges of meeting global competition are stronger than ever.

It is an indicator of the severity of the recent bouts of bad weather worldwide that the FAO broke with tradition and issued one of its Food Price Index releases in August 2012, with the inclement conditions having sparked a surge in the Index after three months of decline. The increase was especially evident in Cereals and Sugar and continuing unfavourable weather is expected to see prices for these commodities remain high in the second half of the year.

Summary of Outlook for Ireland from Teagasc

• Farm incomes across all areas increased substantially in 2011 compared to previous years
• However, there are huge volatility risks in agri markets that will likely see narrowing margins in 2012
• Overall production costs on-farm will be greater in 2012 than 2011 because of higher cereal and energy prices and this will have an effect on margins in all sectors

Sustainability and Climate Change

Smart, green, growth is the basis for progressive sustainable expansion in the agri-food sector out to and beyond 2020. This will be achieved through increased efficiency, higher productivity and competiveness in our primary sectors (agriculture, fisheries and forestry) and also on the processing side in the case of food and drink production.

Further improvement in the environmental performance, resource efficiency, environmental stewardship and the maintenance of a vibrant rural economy are important priorities and they underpin our increased production targets.

A guiding principle of sustainability is that environmental protection and economic competiveness can and should be considered as equal and complementary. One should not be achieved at the expense of the other.

The three pillars of sustainability - social, economic and environmental - are equally important and should carry commensurate weight as we continue to advance agriculture expansion.

Environmental sustainability will be an essential requirement for food production in the decades ahead, in an era when there is an ever growing need for increasing food security to combat global poverty, meet the increasing and changing demands of an expanding world population and combat the impacts of climate change.

There are many studies outlining the negative impacts of climate change on the capacity to produce food in some parts of the world. In this context there is a responsibility to develop increased food production capacity in those parts of the world where climate change impacts are minimal.

Producing more food, while at the same time combating climate change, is one of the most important policy challenges that we face both nationally and internationally. This issue is further compounded when critical resources such as water and energy are becoming increasingly scarce or erratic.

Making better use of land by producing more food per hectare while at the same time reducing the environmental impact is what we must continue to aim for.

Maximisation of the food production strengths that are intrinsic to the Irish agri-food model, particularly our grass-based livestock production systems, provides us with a distinct competitive advantage and allows us to supply high quality produce. Ireland’s produce comes with some of the lowest carbon footprints in the EU, on a per unit of production basis.

The grass based production system in Ireland makes a considerable contribution to global efforts on climate change and food production. Grass fed animals do not require large amounts of cereals that can be used for human consumption. They also convert plant material that is inedible for humans into nutritious food for which the demand is increasing.

At the same time carbon is being sequestered in our soils in contrast to animal production systems which use cereals and very often reduce the carbon content of soils. The Food and Drink Industry’s expansion plans are based on further exploiting the grass resource: this is a clear ambition set out by Teagasc – the contribution to the world food supply will improve and more carbon will be sequestered in our soils.

We will continue to invest in advisory services to ensure knowledge transfer and dissemination of information from researchers to farmers and upwards in the supply chain.

Efforts need to be focussed on further improving sustainability and also reducing reliance on fossil fuel energy sources.

Agriculture and Climate Change.

In terms of overall national emissions Ireland has a uniquely high proportion of emissions from the agriculture sector (26% compared to the EU average of 9%). In the non-traded sector, EPA projections point to the increased proportion of emissions from the agriculture sector. It is projected that the agriculture sector which accounted for 39% of non-traded sector emissions in the 2005 base year and 43% in 2012 will increase to 48% of non-traded sector emissions by 2020 as emissions from fossil fuels decline.

Since the 1990s, emissions from the sector have been falling slowly but steadily. For example, between 1990 and 2006 the amount of methane produced per kg of milk dropped by over 12% mainly due to the rollout of technological advances in dairy production. At the same time, outputs from the sector have been increasing giving rise to the low carbon intensity of Irish food. Sustainable intensification of agricultural production, making better use of the land by producing more food and at the same time reducing the emissions per unit of food produced, is what Irish agriculture does best.

However, it must be stated that the emissions reduction potential of the (world’s) agriculture sector is quite limited, and this is internationally acknowledged. It is imperative therefore that this sectoral limitation is clearly recognised in the future development of national climate policy.

In Ireland’s case, the limited mitigation potential is largely attributable to efficiencies already being achieved. Research and technological developments are key as we continue to strive for even greater efficiencies at farm level.

The Green House gas (GHG) emissions from agriculture are directly related to animal stocking densities associated with our sustainable and intensive grass based food production methods. These methods nevertheless provide for one of the most carbon efficient per unit food production systems in EU and global terms.

All agricultural activities, by their very nature, impact on climate change to some extent. For example, livestock naturally produce methane as part of their daily cycle. It is a natural phenomenon. Managing it to minimise emission impacts is what we do better than most. Ireland’s grass based systems are well managed and minimise these emissions: studies show that our emissions are among the lowest in the world.

Agriculture emissions, as a percentage by source, shows that dairy accounts for 22%, other cattle (including beef) 56%, sheep 7%, pigs 2% and fertiliser use 13%. These figures, when broken down by activity, indicate that enteric fermentation is responsible for 46% of agricultural emissions, manure management 28%, nitrogen application 22% and fuel 4%.

Mitigation options, based on the uptake of sustainable technologies as a means of reducing agriculture GHGs, include inter alia:

• Extending the grazing season.
• Improved breeding
• Increasing the use of low emission slurry application technology
• Earlier springtime spreading of slurry.
• Increasing clover in grass swards.
• Reducing the age at which cattle are slaughtered.

European Commission Joint Research Centre studies on carbon intensities of livestock products.

There is clear international recognition and scientific verification that the carbon footprint of Irish food products as being among the most efficient in the EU.

The European Commission’s Joint Research Centre published a study, entitled “Evaluation of the Livestock Sector Contribution to the EU Greenhouse Gas Emissions” in 2011 and more recently “Agricultural GHG emissions in the EU: an exploratory economic assessment of mitigation policy options”. The Joint Research Centre found thatIrish milk, pork and poultry have some of the lowest carbon footprints among all EU member states. Irish beef was also shown to have a carbon footprint below the EU average.

This was the first time such a range of livestock products was compared across all EU countries in a single study. Its findings demonstrate that Irish agriculture has a leading role to play in relation to the twin goals of abating climate change and improving food security.

It also confirms that Ireland is a highly efficient food producer with a low carbon footprint (on a per unit of production basis). Together with high national standards regarding water quality, biodiversity and animal welfare; Ireland therefore is rightly regarded as being among the most climate efficient EU countries where food can be carbon efficiently produced with least impact least on the environment.

Carbon Leakage

Carbon leakage is a substantive world issue which must be avoided in order for real emissions benefits to accrue at global level.

Restricting carbon efficient food production in countries such as Ireland, where the majority of product is destined for world markets, is certainly not the answer. The food production gap might then be filled by product from countries with less efficient and environmentally damaging systems. In many cases this would lead to a double negative from further deforestation.

Deforestation continues to increase and it is already responsible for almost 20% of human caused carbon emissions at global level. This trend must be reversed rather than encouraged and restricting Irish agriculture (and the sector’s expansion plans) would most likely stimulate carbon leakage.

Across the world, temperature rises as a result of climate change are known to slow economic growth especially in poorer countries. For example, studies have shown how maize yields plummet as growing season temperatures exceed 30C thresholds. In turn, lost agricultural productivity can have considerable knock-on effects for other sectors. In this context, there is an increased responsibility to increase food production capacity in countries where impacts of climate change are minimal.

It must be ensured that sustainably produced food from Ireland and other efficient producers is not replaced by food produced from farming systems with higher emissions, leading to ecosystem damage associated with that replacement product.

Agricultural Production and the Environment.

Agriculture continues to be a key indigenous sector in the Irish economy with agri-food exports now approaching €9bn. From the agriculture sector, significant economic, environment, employment and rural development benefits continue to accrue to Ireland. These are set to expand further with the rollout of the industry vision for the sector, Food Harvest 2020; CAP reform; the opening up of new markets; and the lifting of milk quota restrictions in 2015.

Farming plays an important role in the quality of the Irish environment, with farmers acting as guardians of the countryside. Agriculture and forestry are the dominant land uses in Ireland accounting for over 70% of the national territory.

The strengths that underpin Ireland’s green image; our environmentally-friendly grass based production system; and the level of knowledge, expertise, quality control and environmental skill sets of our primary producers places Ireland in an advantageous position to contribute to this global challenge. The efficiency of our agricultural production systems is internationally recognised both from the economic and environmental perspectives.

At global level, the human population is rapidly expanding and is set to rise by an additional 2 billion people (to 9 billion) by 2050. Ireland currently produces enough food to feed a human population of well over 30 million people.

The continuation of a joined up approach which features sustainable growth, allied to smarter greener agricultural systems, is key to the continued expansion of the sector. Benefits include, achieving economies of scale, continuing to lower carbon footprints on a “per unit of production” basis; and progressive protection of the environment when the system is well managed and monitored.

Research

There is an ever increasing recognition of the critical role research and innovation has to play in meeting the Grand Societal Challenges of the 21st century, particularly in the context of an ever growing population and the consequential food security challenge posed.

As Minister of Agriculture, Food and the Marine, I am fully supportive of Research and Development.Food Harvest 2020 highlights the key role that research, technology and innovation have to play in developing a strong, competitive and vibrant agri-food industry.

Ireland is a founder member of the Global Research Alliance. Recently I was delighted to open Teagasc's new Animal Bioscience Centre which strengthensthe organisation’s capacity to participate in research collaborations under important international initiatives such as the Global Research Alliance on Agricultural Greenhouse Gases and the Joint Programming Initiative on Agriculture, Food Security and Climate Change (FACCE JPI).

My colleagues in Government are committed to Science, Technology and Innovation and understand the necessity to commit significant financial resources to underpin the growth and development of the Irish Economy including the agri-food sector. Such resources are, however, limited and so I was delighted to learn that agri-food featured strongly among the 14 areas prioritised for future funding under the National Research Prioritisation Exercise that has now been endorsed by Government. As part of the Prioritisation Action Group (PAG), chaired by my colleague Minister Sean Sherlock, my Department is now leading a Working Group charged with developing Action Plans for two of the most relevant prioritised areas namely ‘Sustainable Food Production and Processing’ and ‘Food for Health’.

My Department has committed significant financial resources to agri-food research through both core grant in aid to Teagasc and the Department’s three competitive research funding programmes: