Impact of Covid-19 on Farming in Ireland

Dear Sir/Madam,

In response to the Covid-19 Public Consultation the ICMSA (Irish Creamery Milk Suppliers Association) would like to make the following comments.

ICMSA is a national, independent body, representing all farmers across Ireland, particularly dairy and livestock, at local, national and EU levels, and defending the incomes of farm families.

The Impact of Covid-19 on the Irish Agricultural Sector

The Covid-19 pandemic had significant consequences for Ireland’s agricultural sector, affecting food production, market stability, farm operations, and the wellbeing of the farming communities. Despite these challenges, the sector demonstrated remarkable resilience, maintaining its role as the country’s largest indigenous export sector with exports of €13.2 billion in 2020 and €15.2 billion in 2021.

Sector-Wide Impacts

The pandemic caused considerable uncertainty, particularly during the initial outbreak. Farmers expressed concern over supply chain disruptions, with some resorting to stockpiling resources. To support the sector, the Irish government extended a range of financial assistance schemes to farmers and agri-food businesses, including the Covid-19 Credit Guarantee Scheme and the Covid-19 Loan Scheme.

Beef Farming
In 2020, beef finishers were among those most affected by the economic fallout of the pandemic. To mitigate these effects:

• A €50 million support scheme was introduced under the EU’s Temporary Framework for State Aid.

• Approximately 42,000 farmers were eligible for payments based on cattle slaughtered between February and June 2020, capped at 100 animals per herd, with an estimated €100 per animal provided.

• Additional financial relief came through advanced payments under existing schemes such as the Basic Payment Scheme {BPS), Green Low-Carbon Agri-Environment Scheme {GLAS), and the Organic Farming Scheme.

Dairy Farming

Dairy farmers faced initial price volatility due to disruptions in global markets and the collapse of the food service sector. However:

• Milk prices stabilised later in 2020, supported by strong retail demand.

• Dairy farm incomes increased by 13% aided by favourable weather, lower production costs, and increased milk output.

• Labour shortages during the critical spring calving season caused increased physical and mental strain on farmers, as isolation requirements made staff unavailable.

• The pandemic also accelerated the introduction of online livestock marts, which facilitated animal sales but reduced vital social interactions for rural communities.


Developments in 2021

• The Department of Agriculture’s budget was increased by 11%, focusing on supporting farm families.

• Milk production rose by 6%, milk prices increased by 16%, and dairy farm incomes grew by 23%, though production costs also climbed by 9% per litre to a total cost of 26.5 c/litre.

• Farm incomes across the agricultural sector increased by 27%

• Soaring input costs for fuel, fertiliser, and electricity were offset by high agricultural output prices.

• Social isolation remained a critical issue, with three in four farmers reporting negative social impacts from the pandemic.

Commenting on the summary outlined above it is clear to see that dairy farm incomes were relatively positive in 2020 and 2021. However, it is important to note that dairy farming is quite cyclical in terms of income. With the food services industry curtailed due to Covid-19 the ICMSA feels that dairy farms were prevented from maximising their profits in 2020 and 2021. This was important as 2023 was a difficult year and that improved incomes from 2020 and 2021 could have further protected farmers in 2023.

The Social Impact of Farming and lessons from Covid-19

The importance of the social aspect of farming is often underestimated, yet it is an area of concern. One of the more alarming revelations during the Covid-19 pandemic was that some farmers reported no significant change in their social interactions during periods of strict lockdown. While many people across the country experienced a dramatic reduction in social engagement, the fact that for some within the farming community daily life remained unchanged in this regard starkly highlighted the often-isolated nature of the profession.

For other farmers who rely on traditional community outlets such as religious gatherings, local pubs, sporting events, and other social occasions, the restrictions of the pandemic were particularly difficult. These individuals were abruptly thrust into social isolation, with limited opportunities for meaningful social connections.

The ICMSA believes this is an important observation that warrants serious consideration. While the physical health implications of Covid-19 understandably took priority, future strategies for managing crises of this nature must also place a strong emphasis on mental health and social wellbeing, particularly for those in rural and isolated communities.

Technological advancements have undoubtedly made it easier to stay connected; however, this is not always the case for the farming population, especially among older individuals. Many elderly farmers may struggle to navigate modern communication technologies, leaving them even more vulnerable to isolation during times of restricted movement.

More must be done to educate and support the older generation in adopting and using these technologies effectively. Ensuring that farmers and rural residents are equipped to maintain social connections during future adversarial events is essential-not only for their mental health but for the resilience and sustainability of rural communities as a whole.

Conclusion

To conclude Covid-19 had many ramifications for farmers. The initial drop in milk price/beef prices caused by the disruption of the food services industry hampered farm incomes at the start of 2020. Covid-19 reinforced to the farming sector the importance of profit margins for beef and dairy farmers. Despite the supports that were available, Covid-19 highlighted that the price a producer receives for their product is the keystone to farm profitability.

The EU and government must have a strategic plan to protect farmers from poor farmgate prices in the event of an atypical event like Covid-19. Had farmgate prices not been sufficient during Covid-19 then farmers would have struggled to make repayments.

The loan support schemes were an important aid to farmers that may have encountered financial difficulties due to the pandemic. ICMSA welcomed the outlet for farmers to refinance their loans but there was limitations to this. ICMSA is suggesting an income volatility mechanism be put in place to aid farmers against events like Covid-19. This would essentially be a farm deposit scheme that would allow farmers to build resilience in a tax efficient manner. It would protect farmers against income drops due to weather, geopolitical events, disease etc…

ICMSA also feels farmers could have been given more assurances around farm input supply lines. These assurances would have aided farmers in making better decisions. We also felt that farmers could have been better informed about the supports available to them during Covid-19.

As with all crises, valuable lessons emerge-many of which can be applied to the agricultural sector. One such parallel is the global response to Covid-19 and the current, ongoing battle against Bovine Tuberculosis {TB) in cattle. The urgency and necessity to develop a vaccine for Covid-19 reflect the longstanding need for an effective vaccine to combat TB in livestock. Both diseases carry significant cost implications, not only in direct terms but in their broader economic and social impacts. The rapid development and global rollout of Covid-19 vaccines demonstrated what is possible when the international community mobilises with shared purpose and determination. The streamlined development, testing, and administration processes-underpinned by scientific collaboration and unprecedented resource allocation-highlighted humanity’s capacity to respond to complex biological threats when there is sufficient political will and investment.

As mentioned, one of the concerning effects of Covid-19 was the increased isolation experienced by many farmers. The inherently solitary nature of farming was further intensified by the restrictions and social distancing measures imposed during the pandemic. Moving forward, more must be done to ensure that farmers and rural communities do not face the same levels of isolation in future crises.

ICMSA hopes that this review of Covid-19 will help to inform an improved contingency mechanism for agriculture should we experience as similar event again.