GIVING DIRECTIVES OFF PARTIAL INFORMATION

An all too common observation about the directives given to Irish farmers is that they rarely seem to be based on a thorough understanding of the whole picture, or at least, most of it.

One of the most frequent examples is the use of partial costings to ‘illustrate’ that Ireland’s dairy farming model is low-cost and internationally competitive. It is an illusion which provides the foundations for writing strategies and making major decisions. There are academic justifications for using partial costings when making international cost comparisons but they do not provide reason for using the same when assessing the long-term capacity of a farming industry to produce low-cost milk. Simply, long-term costs have to account for family labour, debt burdens and capital employed. To ignore them is a fallacy and it is an error that will prolong the pain within the dairy sector.

Anyhow enough said about the dairy sector; it appears that the tax payer is responding to appeals to help it through its difficult times. It will be interesting to see what comes next if the long-talked about cyclical upturn does not happen on cue. Will the industry’s hierarchy be able to continue to deflect attention away from its new expansion-era product mix and its recent, powder-focused investments? Achieving bottom-of-Europe prices is not sustainable for small Irish dairy farms.

The ICSA has been complaining that too much focus has been placed upon the dairy farmers. The bad news tends to come thick and fast for the beef farmers and they are rarely not in crisis. One wonders why they continue. They do so for a number of reasons including tradition, beef is often part time and can be fit around off-farm money earning, and the presence of support payments.

It is interesting to read how often beef production is brought into question in the press; farming and otherwise. There is clearly an anti-animal farming lobby around. Within the broader agricultural industry, there are also those who question its future and certainly the future of the ‘inefficient’ suckler farmer [where ‘inefficiency’ is determined by profitability and carbon emissions].

In the context of profitability is it right to judge the viability of such an enterprise on profits per farm, per head or even per hectare? Most likely the farmer’s decision is made on the basis of profits per unit of labour employed. It may be the case that ‘dog and stick’ farming may yield better returns per hour than full-time beef farming. These days it may not lose as much as other enterprises.

And one should not forget, ‘profit’ is not just about money, it can be much more altruistic but no less valuable. It is not always just about economics. Many farmers will carry on simply for the love of what they do. They may choose to cross-subsidize their farm from other sources of finance, but that is their choice. And no amount of discussion group attendance is going to change them; not least when it means more time commitment for less return per hour. Should we criticize them for contributing too much emissions to the industry total? Not in a free world where we still judge a person’s right to emit on the basis of whether they can afford it in monetary terms. And maybe, as I will return to later, we may be wrongly judging some farmers on emissions and not NET emissions.

When it comes to implicating cattle farming in terms of causing climate change, just how great is the partial information problem? Just how much of the cited evidence is based upon adding up emissions only? Clearly there is a lobby who want to see animal agriculture brought to a halt and carbon emissions is a stick to beat the industry with. Is it, however, a balanced approach? And is the information upon which judgements are based totally up-to-date in what, upon research, one can suggest is now a fast evolving subject that has been previously neglected?

One is detecting a rising awareness that all cattle production systems are not equal. It may be that emissions are fairly linear in terms of emission per unit of output [although cow maintenance energy usage is likely to create some differentials] but just ask for tables of emissions for different cattle farming systems. This is fundamental farm budgeting information but it does not seem to be readily available. Both lobbying and policy seems to be based upon broad-brush information that lacks the subtleties needed to make sound, informed decisions; be it at the policy or farm level. From a farm business management perspective, we need to move on from counting emissions to understanding emissions and carbon sequestration. We need to judge cattle farming on NET emissions; not least because some are suggesting that some systems can be net sequesters of carbon.

As a result of a lack of information are we in danger of wrongly judging cattle farming systems? Can one equate the situation to the diesel / petrol situation whereby a carbon dioxide emission measure scored diesel engines better than petrol ones? Now, when factoring in nitrous oxide, is the reverse the case? A core part of business evaluation and decision making revolves around the use of key performance indicators [KPI] and doing so is fine; so long as you use the right KPI. With cattle farming it is looking a distinct possibility that we are starting to use the wrong KPI’s. If so it could lead to some major misdirection of the cattle industry and the resources devoted to supporting it.

The Irish cattle industry is going to be under increasing pressure from the climate change direction. Its expansion plans are questionable; not just based upon a simplistic emission-counting KPI but also from a farm income KPI. Are these KPI’s going to improve significantly by expanding across the board or substituting part-time suckler farming with, say, full-time dairy farming [not forgetting that one should also use a KPI of income per labour or management hour] or alternative beef systems? And one should also remember that there are KPI’s that relate to other environmental issues [nitrates, biodiversity and landscape management]; some of which are quite subjective and difficult to quantify. It is looking like an increasingly complex subject.

At present the focus is on production efficiency and calculating carbon emissions. Vast resources are being dedicated to it but is it too simplistic? Are we locked into KPIs that are already being out-dated? Are we also embedding them into promotions that highlight ‘sustainability’ when we do not have the full picture? I frequently talk about the need to premiumize farm-gate prices through the creation of consumer-facing, multi-characteristic products as the only way Ireland’s small farms can survive in an international market place. Getting it right in terms of NET emissions and other environmental criteria is a part of those products. But just where are we now?

I have written about Brexit at length and how it makes it imperative that Ireland moves away from commodities and into products. Ireland needs to adopt climate smart agriculture but it has to be done in a way that places its activities transparently in front of the consumer and adds value at the farm-gate. We need farming systems that create products that meet the demands of the consumer at one end and the needs of the farmer at the other. At present, it is too much about those in the middle. As with a Belted Galloway cow, it is the two black ends that count, the white bit is just there to join them together! We need food chains to operate in a similar way.

Climate change will inevitably impose some constraints on cattle production. This can be seen as a constraint on expansion-orientated production or as an opportunity to take a brief step backwards and to reassess just what is going on. If a number of KPI’s are used to evaluate systems and those KPI’s are sufficiently broad-based it may be that we have to rethink ‘old-fashioned’ suckler beef systems. We may have to rethink the way we graze, the breeds we use, the abandon with which we apply nitrogen, the use of clover, the employment of multi-species swards…

Grass-fed may be at the core of more sustainable beef production but it is unlikely to be the whole story. There is a long list of relevant characteristics [to include within a premium to the consumer product] and it is a list that will be about more than cost reduction through higher growth rates and attaining a perfect 365-day calving index. Small-scale beef farming will have to become far more sophisticated than that to survive. It may also be rather more interesting and appealing to those who do it for the love of it as much as for the money. This will make unpleasant reading for some but the alternative may be that we dismiss some farming systems that could offer a better way forwards simply because we are not judging them on complete and holistic criteria [or KPI’s if you wish].

Meeting the complete and complex demands of the higher-income and/or more food-aware consumer [in Ireland, the UK, the USA, Japan, Europe, the Middle East…] is an opportunity and it may be the only one for small-scale Irish family farms facing Brexit and climate change. It is however only an opportunity if the best systems are being adopted in terms of delivering upon net emissions, environmental and landscape issues, animal welfare and eating quality. And it is only an opportunity if such a complete product can actually be delivered to the premium-paying consumer. To achieve all of this is going to take some vision and broad-minded and rapid thinking. Climate change is upon us but we appear to have been slow out of the blocks when it comes to evaluating our cattle farming systems and establishing an information base that will allow us to properly determine the way to go down on the farm. As a consequence, we need to get more fully informed and fast.

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