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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Fertiliser price surge

Summary

Deputy Collins warned that steep fertiliser price increases were threatening farmers’ viability and said they needed relief, not just information packs. The Tánaiste said Government was seized of the issue, acknowledged prices had trebled in some cases, and argued that reducing fertiliser use could help both costs and the environment, though it would not solve the problem on its own.

Many farmers in this country are facing a wipeout this year due to the astronomical increases in fertiliser costs. A farmer who paid €300 last year for a tonne, or 20 bags, of the most popular type of fertiliser will pay €900 this year. This is an astonishing increase that will leave many farmers with a nightmare decision as to how they will pay for fertiliser this year. Experts estimate that a farmer with 100 ha will end up paying €40,000 more for fertiliser this year. In fairness, most farmers I know would not own 100 ha but most would own 50 ha so their fertiliser costs will increase by €20,000. A typical mid-sized farmer feeding 120 tonnes of rations and using 30 tonnes of fertiliser per year will see his or her fertiliser bill rising by €23,400 a year. No farmer can take this hit. They will simply go out of business, owing co-ops throughout the country tens of thousands of euro.

The Government is well aware of this crisis. In October, the Taoiseach was told on the floor of the Dáil by the Rural Independent Group that this fertiliser crisis was imminent and that the Government needed to do something about it immediately. In November, another member of our group told the Taoiseach to take action immediately. In the past couple of weeks, we have been pleading with the Government to take action but we have heard nothing to date about what the Government has done. The week before last at a meeting of the Joint Committee on Agriculture, Food and the Marine, I challenged Mr. Fabien Santini of the EU agriculture committee on solutions to this crisis. He said that the rising price of gas was mainly to blame, as well as the fact that import levies are adding to the crisis. However, he also stated that the government of each member state has been given latitude to provide unique farmer support through the relaxation of the state aid framework. He further stated that this will only be available until June 2022 and would allow for financial aid.

Shamefully, at that same meeting, the Green Party member of the committee emphatically expressed that he wanted to broaden the issue to ask why we are so dependent on fertiliser. He said, "The reality is that these artificial fertilisers are having a devastating effect locally". He further stated:

In addition, using these inputs allows us to grow more grass and have higher stocking rates in our farms. That has a knock-on increase on the methane that we produce. All in all, it seems to make sense to drive the organic angle ...

My worry is that such deranged thinking is feeding into the mindset of the Government and is detrimental to the food chain in this country. It is astonishing that our Fianna Fáil-Fine Gael-Green Party Government has so far failed to use the tools referred to by Mr. Santini to assist our crisis-struck farmers. It is shameful that our Minister for Agriculture, Food and the Marine has completely failed to take action despite the crisis we are in. Irish farming families need a strong Government at this time and a subsidy is immediately needed for farmers who purchase fertilisers, perhaps one similar to the subsidy given to farmers during the fodder crisis some years back. Maybe I am wrong and maybe the Greens are not wagging the tail of this Fianna Fáil and Fine Gael Government. If not, what has the Government discussed at Cabinet since the Taoiseach was told of this fertiliser cost crisis, which affects tens of thousands of farmers, in October and November? What solutions has the Government put in place to save many farmers from wipe-out this year?

Comment on this
Leo Varadkar The Tánaiste Fine Gael

I am not at liberty to tell the Deputy what was and was not discussed at Cabinet, but I can tell him that the Government is seized of this issue. I had an opportunity to meet with the Irish Farmers Association, IFA yesterday, alongside the Minister of State, Deputy Heydon. It raised a lot of issues, including climate action, the Common Agricultural Policy, its concerns around the dairy forum, which I share, and the problems the pig industry is facing. One of the matters raised was the very high price and cost of fertilisers, which in some cases have even trebled in cost. That is an extraordinary increase for any input and it will, in turn, increase costs for farmers. The latter can then drive up food prices, which impacts negatively on consumers. The levels of dry farming could potentially come down as well, which we do not want to happen.

While there are a number of factors at play in the market, there is unfortunately no sign of fertiliser prices easing in the short to medium term. Energy prices will remain well above January 2021 levels and increased global demand continues, particularly from the big grain-producing countries. Increased transport costs and EU-imposed tariffs on duties on certain third country imports are also adding to prices. The information we have from the Department of Agriculture, Food and the Marine indicates that fertiliser supplies are likely to remain tight but usage is expected to be lower over the next few months in response to higher prices. From 2 February, Russia imposed a ban on ammonium nitrate exports for two months until 2 April. This will place added pressure on the availability of fertiliser, particularly calcium ammonium nitrate. The Department is continuing to monitor the situation very closely.

My colleague, the Minister for Agriculture, Food and the Marine, Deputy McConalogue, launched the 2022 soils, nutrients and fertiliser campaign on 26 January in response to the unprecedented rise in fertiliser prices. As part of this campaign Teagasc has put together a comprehensive information pack for farmers and their advisers with a compendium of 20 fact sheets designed to optimise the use of plant nutrients to help farmers address the challenge of maintaining their farm outputs in the face of rising fertiliser costs and reduced availability. These fact sheets cover soil testing, lime application, nitrogen use, organic manures, fertiliser spreading and many other topics that will be incredibly useful for farmers.

The European Commission is currently examining the effect on the European market of removing anti-dumping measures. A decision on this is expected shortly. If that decision is favourable, it may allow us to do something more to help.

Comment on this

I thank the Tánaiste for his reply, but it was muddled to say the least. The most he said is that farmers will get an information pack. Farmers do not want an information pack; they want some of the relief of the sort that Mr. Santini of the EU agricultural committee told us two weeks ago can be given by the Government. We know of farmers who could not get credit and who had to pay upfront for fertiliser in November and December. They are not able to sustain this astronomical increase in the cost of fertiliser. The Tánaiste says the Russians are the problem. We saw what happened last week with the Russians and the fishermen. We will have to send out a couple of farmers to resolve this issue, seeing as the fishermen were the only ones who could resolve the issue last week. The resolution to this problem lies with the Government. It can intervene and is failing to do so. Please tell me the Government is going to intervene. What interventions is it going to make in order to assist farmers? They do not need an information package. They are not stupid. They are well aware of what is going on. Their pockets are being dented hot and heavy and the Government is not doing anything about it even though it can. I am pleading with the Tánaiste to stand by the farmers of this country immediately.

Comment on this
Leo Varadkar The Tánaiste Fine Gael

We would all agree that reduced use of fertiliser would be beneficial. It would be beneficial environmentally and would also help reduce costs for farmers. I do not think we should dismiss Teagasc in trying to give advice to farmers on how they can do that. I am sure the vast majority know all of this already but there may be people who benefit from that additional advice and I do not think it should be dismissed in that way. I acknowledge that reducing fertiliser use is not going to solve this problem. We need to reduce the price as well. We are, in comparison with other EU countries, a very small market when it comes to fertiliser sales. No fertilisers are manufactured in Ireland and this results in indigenous fertiliser companies being price-takers, dependent on global supply and demand and subject to exchange rates. The Minister is working with the European Commission on this, particularly in relation to trade defence instruments such as the imposition of duties and tariffs, which are done on a European level. If we could get some change on that it would help bring down prices. We are working on that at the moment.

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