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Danny Healy-Rae warns of 'savage' fertiliser price surge

Danny Healy-Rae warns of 'savage' fertiliser price surge

Danny Healy-Rae spoke in the Dáil on 26 January 2022 about a sharp rise in fertiliser prices and warned small farmers face bankruptcy. He blamed higher natural gas costs, EU levies and the Green Agenda, and urged the Taoiseach to intervene with the EU to abolish levies.

Fertiliser price increases and farm impact


The deputy detailed steep price rises - urea from €330 to €930 a tonne, nitrogen from €240 to €690 - and gave an example of a farmer whose fertiliser bill would jump from €7,000 to €17,000. He warned that small suckler farmers in South Kerry, dairy producers and tillage farmers face going broke fast if prices do not fall.

Causes cited by the deputy


He attributed the primary drivers to a massive increase in natural gas prices linked to the Green Agenda to decarbonise electricity generation and to EU policies that protect EU fertiliser producers by imposing levies on supplies from Russia and other countries. He also criticised remarks he said were made by a Green Party TD welcoming higher fertiliser costs that would force change.

Agriculture Committee exchange and state aid window


At the Agriculture Committee the deputy and colleagues questioned Fabian Santini of the EU Agriculture Commission, who said member states may provide targeted farmer support through a relaxation of the state aid framework. That flexibility, the deputy noted, is available only until June of that year.

Government response and support measures


The minister responding acknowledged the scale of the problem and cited close to €10 billion in EU and Exchequer funding to support over 120,000 farm families under the next CAP period, and about €4.5 billion paid to farmers since June 2020. The minister said the issue is linked to global gas markets and lower Russian gas flows, that the matter has been raised with the European Commission, and that options - including examining anti-dumping duties and promoting improved soil fertility, greater use of clover and multi-species swords - are being considered alongside a short- and long-term roadmap for farmers.

Danny Healy-Rae — frame from remarks: Danny Healy-Rae warns of 'savage' fertiliser price surge (26.01.2022)

Consumer impact and future risks


The deputy warned that higher farm input costs will push up grocery prices beyond a recent €780 annual increase and said farmers will have to pass costs on to consumers or risk collapse. He stressed the potential loss of family farms and challenged the adequacy of current supports for those most exposed.

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Transcript
I want to raise again with you today the savage increase in the cost of fertiliser. I did this before, back in November last. I want to know what the Minister for Agriculture, the Minister for Foreign Affairs herself and this Government have done to get the price of fertiliser down to an acceptable or reasonable price for small sucker farmers in South Kerry, dairy producers and tillage farmers in Mead, and not carry. This time last year, Uri was €330 a tonne, it is now €930 a tonne. Nitrogen was €240, it is now €690. Past the swat, €350, now €700. 18612 was now €790. One farmer last year, his bill was €7000, it will be €17000 this year. Farmers will go broke and go broke fast, especially small farmers in Kerry. The main driver of the increased fertiliser cost in the EU and here is the massive increase in the natural gas prices due to the Green Agenda to decarbonise electricity generation, and also the EU policy to protect EU fertiliser producers by imposing levies on Russia and other countries supplying fertiliser into the EU. I am calling a new Taoiseach to intervene with the EU and get these levies abolished. Last Wednesday, I attended the Agriculture Eructors Committee and I and others asked Fabian Santini of the EU Agriculture Commission as to what could be done to help our farmers in carrying around the country. From his reply, we understand that each member state has been allowed to provide unique farmers' support through the relaxation of the state aid framework. This facility is only allowed up until June this year. At that meeting, the Green Party TD outlined his pleasure at the increased cost of fertiliser to force crippled farmers into organising farmers and the Greens preventing you from helping the farmers. The Taoiseach, if he cannot alone do something about the fertiliser costs, in order to survive, farmers will have to increase the cost of their products to the consumer, otherwise they will go bust. We all have been told recently that the cost of groceries to the housewife has gone up by €780 in the last year. This figure will go up by double or more in the communion because of the farmers' increased cost of production. Our housewives and consumers prepared to pay the extra cost of food as a result of the Greens and this Government's badly thought-out policies. This will also impact the availability of farmers and increase the price of it. Farmers have been wrongly attacked and vilified by the Greens and many others in this Chamber and outside of here being blamed for everything. Even though they produce good healthy food of the highest quality while at the same time maintaining the highest environmental standards abiding by all the Department and European regulations. Thank you, Deputy, for raising the issue. I would just point out that close to 10 billion euros in total between the European Union and the Exchequer funding will support over 120,000 farm families over the next common agricultural policy period between 2023 and 2027. So Minister McConnell-Logue has worked very hard on behalf of Irish farmers to get the best package possible in the context of the common agricultural strategy over the next number of years. And in addition to that, close to 4.5 billion has been paid out to farmers since June of 2020 through various schemes like the basic payment scheme, ANC, GLOSS and beef schemes. An average family farm income increased during 2020 and again in 2021 for the third year in a row reflecting good output prices. However, you are correct, there is very significant concern on the cost side in 2022 for farmers in the context of what you have outlined, the price of fertiliser. The high price of natural gas, as you know, a key ingredient in fertiliser production, has caused very significant disruption in production in the international fertiliser industry. So again, this is a global problem and issue. Large increases in energy prices is a European-wide phenomenon. It is a combination, again, of global demands for gas as economies recover from COVID, but also as well as lower flows of gas from Russia. And given that Europe receives a large amount of its gas supply from Russia, the geopolitical impact of the current build-up of Russian troops at the Ukrainian border may even drive gas and fertiliser prices up further. So Minister Maconlog has raised this at the EU Agricultural and Fishery Council meeting in terms of these rising costs. He has called on the European Union Commission to consider all of the options to ease the pressure on farmers at this time. And that particularly includes monitoring the evolution of markets linked to agricultural inputs, particularly in relation to fertilisers, and a question that I think you raised as to whether the imposition of anti-dumping duties on fertiliser imports continues to be appropriate given the current crisis, and for this matter to be examined as a priority. So the Minister has raised that with the European Commission. And as you know, parallel with that, this has nothing to do with national politics or the particular political perspectives that parties may have in respect of climate and so on. But side by side with that, the Minister is working in terms of giving support to a number of measures including improved soil fertility, greater use of clover and multi-species swords in terms of reducing dependency on chemical nitrogen fertiliser. But that is work that is on the way. But that doesn't, you know, that will help. But the bigger issue is to try and deal with the current crisis in gas price increases that is feeding into the fertiliser problem. And it is a very significant issue. And I know that the Minister has asked Tagusk, you know, to develop a roadmap to assist farmers in the short term, as well as offering some long-term solutions as well. Mr Healy Ray. Thank you for your reply. But I am not happy that we are helping the farmers at all in the serious plight that they have at the present time. I am asking you to ensure that that anti-dumping living is withdrawn. That would at least mean 50 or 50 euros a tune. I am asking you to subsidise the cost of the fertiliser now because if we can see far enough, it is going to increase the cost of food as well. If the farmer has to increase the cost of what he is producing, who is going to pay for it? Only the consumers. And we are hearing all day here from other parties and members that the cost of living has gone beyond the cost of diesel, the cost of everything else. But the cost of food is going to go mad if you don't do something about it. And it will also create a father crisis at the end of the year because fellows can't afford it. I've given an example of one man that his bill was 7,000 last year. It will be 17,000 this year. That's savage for a small farmer trying to survive. And if they can't grow grass, they won't produce beef, they won't produce milk, and they can't produce grain. Thank you Deputy. Time is up. I don't doubt the seriousness of the issue that you have raised, Deputy. It is very serious. It has to be dealt with on a European-wide basis. The Minister is engaging with the European Commission and with his colleagues at the European Agriculture and Fisheries Council to see what can be done here. In addition to that, we have, through the carbon tax revenue, we have ring-fenced significant funding for a new ambitious agri-environmental scheme to be rolled out over the next CAP programme. And that new agri-environmental scheme will target in the region of 50,000 participants with a maximum payment of up to 10,000 to individual farmers. And we will also use revenue over the period in other ways to support materially and in a real way farmer incomes. But we have an issue that all goes back to the energy issue and the flow of gas and gas supplies across Europe and globally. And that is at the core of this. And I have no doubt that the Minister will continue to work with his colleagues in the Council and with the Commission in terms of trying to reduce the pressure on farmers as a result of this. That concludes the Leader's question.