Hobson's Choice: Finding the right mix of agricultural and environmental policy for Irish agriculture

As part of its international obligations, Ireland faces emission reduction targets with respect to greenhouse gases (GHG). These reduction targets are to be achieved both in the short term and over the coming decades. Agriculture is a substantial source (33%) of Ireland’s GHG emissions. Whereas the economic welfare of farmers has been the dominant force in shaping agriculture policy for several decades, there has been a notable increase in environmental concerns and a gradual emergence of environmental policies which are relevant to agriculture, particularly in the last 10 years. The future evolution of the agri-food sector in Ireland must therefore be seen in the context of both the economic growth objectives of national agricultural policy, as well as national environmental policy objectives arising from international obligations. In light of the recent proposals with respect to the EU Common Agricultural Policy (CAP) post-2020 (EC, 2018), environmental objectives will become an increasingly important subset of the CAP objectives and the implementation of the CAP in Ireland. The EU Effort Sharing Decision (ESD) requires that Ireland reduce its non-ETS GHG emission by 20% by 2020 relative to the 2005 level. The reduction target for the non-ETS sector for 2030 is 30%, but incorporates so called flexibility mechanisms designed to make the achievement of this target less onerous. A partial equilibrium model of Irish agriculture is used to explore differing future outcomes in terms of the sector’s size and associated GHG emissions to 2030. The scenario analysis employed demonstrates the implications of different future pathways for bovine (dairy and beef) agriculture, the dominant sector in Irish agriculture and the principal source of its GHG emissions. Mitigation actions are then factored in to provide measures of future levels of emissions inclusive of this mitigation capacity. While technical mitigation actions are largely grounded in interventions that are based on science, the scenario analysis makes clear that the scale of the ultimate challenge in mitigating agricultural GHG emissions will be determined by the overall size of the agriculture sector and the intensity of production per hectare. The dairy and beef sectors in Ireland are noteworthy for their contrasting levels of profitability; dependence on support payments; and farm income. Now that the EU milk quota has been eliminated, from the perspective of economic development, an increase in the size of the dairy sector and entry into the dairy sector are desirable economic policy objectives. However, the paper demonstrates the strong contrast between dairy and beef farms, not just in terms of income but also in terms of intensity of production per hectare and the associated level of emissions produced. It follows that a transition from beef production to dairy production, while desirable from the point of view of farm income, could have adverse consequences for emissions.