Loss of Derogation Could Irish Cost Dairy Sector €1b

The Irish Farmers’ Association (IFA) has warned that the loss of the Nitrates derogation could have a “frightening” economic impact on the dairy sector and the wider rural economy.

IFA Dairy Chair Martin McElearney was responding to a Teagasc report outlining the potential consequences for farmers if the derogation, which allows higher levels of nitrogen application on pasture, is removed. According to the report, family farm incomes could fall by up to 39%, a level Mr McElearney described as “unsustainable” and likely to force many farmers out of business.

The report predicts that dairy cow numbers could fall by up to 15% nationally, with milk production declining by as much as 1.2 billion litres. Such a reduction would translate to an estimated €1 billion loss in dairy exports annually, with knock-on effects including potential job losses across processing, agri-services, veterinary services, and other rural businesses reliant on dairy farming.

Beyond the dairy sector, the report highlights broader pressures on the land market. If farmers affected by the loss of the derogation sought additional land to maintain their herds, they would need an extra 113,000 hectares—roughly the size of County Kildare—potentially affecting multiple agricultural sectors indirectly.

“The latest EPA results show that farmers have delivered on their side of the bargain by improving water quality,” Mr McElearney said. “It is now time for the Minister and the Department to deliver on theirs by securing another derogation that is workable for farmers. Otherwise, as the report shows, we are facing an economic catastrophe for the sector.”