Farmers now face costly expansion or diversification away from farming under the new EU system of pay, writes Seán MacConnell.

Martin Brosnan's 75-acre dairy farm lies under the shadow of Kerry Airport at Farranfore, just north of Tralee. He took it over from his parents when they retired from farming under the Early Retirement Scheme in 1994.

Brosnan and his wife reckon that they cannot hope to raise their four children on a milk quota of 61,000 gallons from the couple's 49 pedigree Friesian cows in the new era when production will be decoupled from supports.

"We are landlocked here, surrounded by young farmers anxious to increase their milk quotas, and there is very little available to them. I do not expect it to get any easier or to see more milk appearing from nowhere, because as long as we are limited to the quota, we will have a situation like this," he says. "If we want to stay in and survive in dairying we know we will have to expand to an extent that would involve selling this farm and going elsewhere to buy a larger one. You would be looking at an outlay of between €1.5 or €2 million to stay in dairying as a main enterprise."

However, for Brosnan and his family the future lies in continuing to build up the herd and in supplying milk to Kerry Co-op as well as in developing the hardy nursery enterprise he has built up.

"I could see that expansion into more milk would be impossible from this area and I was fortunate that my brother is a qualified horticulturist who runs his own garden centre in Killarney," he says. "He used to grow the nursery stock here and about 18 months ago, with an eye to the future, we decided to expand the hardy nursery side to service garden centres and other outlets in the south-west.

"People in the garden centre business down here were getting their supplies mainly from Co Kildare, which has been the centre of the industry in the State. But getting supplies has been costly and people used to have to wait to send in large orders of €1,500 or more so delivery could take place and distribution costs lowered. We decided to diversify in order to stay in the business of farming."

Now the Brosnans' greatly expanded nursery area turns out 350 species of shrub, which are sold to outlets all over Kerry and adjoining counties.

"There was additional expense involved in developing the business, like the outlay on plastic tunnels, and recently, to reduce our workload, we have purchased a potting machine, which helps a great deal," Brosnan says. He believes no-one knows for sure what will happen when the impact of full decoupling kicks in, but his alternative enterprise is bound to help.

Patrick Kelly, who works his Co Donegal farm in partnership with his father, believes that the changes about to take place on Irish farms could bring about an entirely changed landscape.

"Fragmentation of farms is the biggest problem we have here in Donegal," he says. "For instance, we are renting land from six different farmers in the area and I have no idea what is likely to happen to these farmers when the Single Payment is made. Selling sites for houses is the largest single cash crop in Donegal and I think five houses have been built on six of the farms we are renting."

Kelly, who is passionate not only about farming but about the politics of farming, milks 180 cows on his 250-acre farm at Killygordon. The demand for both land and milk quota, to allow farms to expand, is intense in Co Donegal, where, according to Kelly, land is very expensive.

"Up here, someone has to get out of the business of milk production to let someone else expand. That is the truth not only here but everywhere," he says. "No-one is even venturing an opinion whether or not people will be getting out of milk when decoupling cuts in. At the end of the day it will be determined by cost."

Kelly, who is on the board of Donegal Co-operative, says many farmers in the county are worried about the cost of complying with a nitrate directive. He feels that the costs involved will determine whether or not farmers remain at the same levels of production.

Kelly currently grows 38 acres of cereal feed for his cattle, but has not made up his mind whether to do the same thing in the coming year. He has been struck, he says, by the depth of awareness in the farming community about the upcoming changes, but finds it quite remarkable that there are so few predictions about what is likely to happen.

"The way things are in Donegal, I do not expect to see large tracts of the countryside left fallow, but only time will really prove that wrong," he says.

Jim McCarthy, who lives near Castledermot, Co Kildare, is one of Ireland's largest tillage farmers and, despite his reputation as one of the smartest farmers in the country, he too is unsure what the future holds. Change is bearing down fast on him because he has to make plans for next year and decide within the next few weeks what winter cereals he will be planting.

Currently, he grows nearly 2,000 acres of cereals on land rented from 19 other people."The first thing that is obvious to me is that the price of rented land is now too expensive, and if commodity prices for grain continue to drop there will be no future at all in the business," he says.

Unlike many tillage growers who rent land, McCarthy has long-term leases with his clients and has started to look for rent reviews."The rent of an acre of cereal ground should be equal to what the grower gets for a tonne of wheat - and currently that price stands at €114," he says. "That is the sum on which the industry has to be based. I know some growers have decided to stack their entitlements from lands they have rented and cut back on acreage, but I will not be doing that this year at least. However, should the commodity price continue to fall I will be forced to cut back on what I plant in the following year.

"In one sense there has been a cutback this year because one farm I had leased has been sold and as a result I do not have the use of it this year. But I will have to make savings in other areas as well.There will have to be savings made on machinery and I will be using only two tractors this year, with one person to help me."

He also plans to grow more oilseed rape this year than in previous years on the basis that demand for it is bound to grow because of the oil crisis.

The Co Cork-born McCarthy, who uses an eco-tillage system involving the minimum disturbance of soil when planting, worries that environmental pressures could drive the pig and poultry industry out of Ireland, with cereal farmers losing their main customers.

He also warns that the EU pot from which farmers will get their single payment will not be getting any bigger but can only shrink with planned reductions and inflation.

Series concluded