Farmers could boost their incomes by switching from beef

John FitzGerald: The economics of beef are on a knife edge – changing makes sense

Alternative land uses could provide positive returns, rather than the losses that beef production entails. Photograph: Brenda Fitzsimons

Alternative land uses could provide positive returns, rather than the losses that beef production entails. Photograph: Brenda Fitzsimons

 

As Ireland’s economy has recovered, there has been a steady increase since 2014 in our greenhouse gas emissions.

If Ireland is to have any chance of meeting its target for 2030 to bring these emissions to 30 per cent below their 2005 level, urgent action will be needed across all sectors of the economy.

The Government’s Climate Action Plan, published last month, set out a good framework for achieving our global 2030 target, which included targets for individual sectors.

Targets alone are not enough, however. To ensure they are realised requires new policy measures across the different sectors. On Wednesday the Climate Change Advisory Council, which I chair, published a report setting out its independent advice to the Government on some of the crucial policy changes that are urgently needed to reverse the rising trend in emissions.

The council argues, as it has done previously, that an essential measure is a steady increase in carbon taxes over the coming decade. This has also been supported by the Oireachtas Committee on Climate Change, and by the Citizens’ Assembly. The price of carbon needs to reflect its climate damage, so that greener options make economic sense to households, businesses and farming.

The council advises that some of the revenue raised through higher carbon taxes be used to protect living standards in low-income households when fuel prices rise. The rest of the revenue could be used to compensate households in general, or to encourage climate-friendly initiatives such as home insulation.

Higher carbon prices form an essential first step, but only a first step. This week’s advice from the council pays particular attention to measures needed to reduce emissions from agriculture by 2030, as these now account for a third of our greenhouse gas emissions.

Win-win

In formulating our proposals we aimed for a win-win – to recommend changes that would simultaneously increase farm incomes while also significantly reducing greenhouse gases.

Teagasc, the agricultural research centre, has set out a range of measures that could both reduce farmers’ costs and reduce emissions. These include changes in how farmers dispose of slurry, and the use of an alternative type of fertiliser.

These and other measures Teagasc suggests could further reduce farm emissions, at pretty well zero cost. If all of these proposals were implemented, they could see the agricultural sector make significant progress over the coming decade in tackling climate change.

However, without additional actions, the likely reduction would probably still not be sufficient to enable us reach our national emissions target for 2030.

Currently, dairy farmers make a significant income from the sale of their milk, so cutting output of that sector would be expensive. However, the economics of beef are on a knife edge – even with heavily protected EU beef prices, farmers generally gain no net income from animals sold for meat and may even lose money. Brexit would almost certainly turn this near break-even situation into a major loss for farmers.

The council recommends that farmers be encouraged to gradually move out of beef production and use the land for other purposes, such as woodland or growing biomass. These alternative uses would also suck carbon dioxide from the atmosphere, further reducing net emissions.

Even today, these alternative land uses could provide positive returns, rather than the losses that beef production entails. Incomes earned through alternatives to beef would be much more secure, given the risk that sudden changes in the EU market for beef, for example after Brexit, can bring large losses for farmers.

Artificial beef

In addition, the development of artificial beef through synthetic DNA is already a reality, which will further threaten the long-term viability of beef farming.

While this change in land use looks an attractive policy, there are many obstacles that may prevent farmers making the change. Worries about markets for alternative products, such as timber and biomass, would need to be tackled.

Farmers may see the irreversibility of such changes in land use as entailing increased risks. It is only through dialogue with farmers that these obstacles to change will be ironed out.

If implemented in a sensitive and targeted manner, this policy change would substantially reduce greenhouse gas emissions from agriculture and enhance farm incomes.

The key instrument for encouraging the necessary transition from beef production to a more environmentally desirable use of the land will be the future Common Agricultural Policy (Cap).

In reforming Cap, as it applies to Ireland, a major task will be to adjust the suite of incentives available to send the correct signal that encourages a switch to more environmentally sustainable farming.