As part of Budget 2024, an announcement was made by the Minister for Agriculture Charlie McConalogue that he plans to introduce new grant aid for slurry storage, with a projected 70% grant rate for farmers to create these stores.
The Department of Agriculture envisages that the creation of these slurry stores on non-dairy farms may allow farmers above the 220kg N/ha mark to export slurry instead of reducing their cow numbers or renting more land.
While there is a degree of this happening already, with farmers above the 170kg N/ha mark exporting slurry to remain below the derogation line, the competition for land between the agricultural industries and the growing renewables sector is likely to ramp up the export of slurry.
Dairy farmer Joanne has 220 cows on 80ha, a stocking rate of 2.5LU/ha with an N stocking rate of 230kg N/ha. To bring her N stocking rate below 220, Joanne would have to export 332t, or 332m3 of slurry. Neighbouring tillage farmer Billy is open to taking the slurry, but has to create extra accommodation to do so.
A mass concrete tank on Billy’s farm measuring 32m long x 5m wide x 2.4m deep will give a usable storage space of 337m3, sufficient to take all of Joanne’s excess slurry.
TAMS III reference costs for the excavation and pouring of the above tank comes to €33,140 plus VAT.
To include solid slabs (to prevent rainfall getting in and reducing capacity as well as reducing ammonia loss) would add an additional €15,840 plus VAT, while two agitation points (one at either end) would come to €1,287.14 plus VAT. The cost of the project would total €50,267.14 plus VAT. All the above costs are based on TAMS III reference costs.
Provided all the above costs were included in the 70% grant, the net cost to Billy would be €15,080.12.
Transport and spreading slurry
Assuming the slurry will have to be agitated on Joanne’s dairy farm at €100/hour, the slurry will then have to be transported to Billy’s dairy farm. At a rate of three loads per hour @€70/hour, it will take a contractor 10 hours to complete.
Provided the slurry is to remain in the slurry store over the winter, it will have to be agitated again at a cost of €100/hour, before being spread by LESS (as slurry is coming from a derogation farm) which will have an increased cost of €90/hour.
Spreading at four loads/hour, it will take the contractor 7.5 hours to empty the tank.
The total costs for agitation on both farms, transport of slurry from farm to farm and spreading with LESS equipment on the importing farm totals €1,575.ADVERTISEMENT
Value of slurry
Teagasc analysis from April this year puts a value of €9.70/m3 on cattle slurry. The value of the 322m3 of the slurry exported therefore comes to €3,220.40.
Based on Billy covering the annual cost of transport, agitation and spreading, plus the cost associated with creating the slurry store from day one, it will be nine years before Billy sees a return on investment for creating the slurry store, provided he had the capital to fund the project.
If Billy had to borrow €15,000 from his credit union, at a rate of 6.75% over a five-year period, his total repayments come to €18,169.55 and it would be 11 years before he would see a return on investment.
Game of chance
The above is also based on Billy being able to secure the capital to build the tank, and after a tough year for tillage farmers it is hard to see him investing in slurry storage that will not yield a return for at least seven years.ADVERTISEMENT
We also have to remember that the above agreement is not written in stone.
Any number of things could happen on either farmer’s side that means the agreement could end or alter.
A case of TB could arise on the dairy farm that would reduce numbers, meaning that Joanne would come below the 220kg N/ha mark and not need to export slurry.
Equally, she may choose to reduce cow numbers due to labour issues or personal reasons.
Joanne may also be presented with the opportunity to rent land that would dilute her nitrates figures, negating her need to export slurry.
At the same time, Billy may find that he has lost land and cannot physically take in slurry, or that after several years of spreading high P slurry that his soil sample results prevent him from importing any more.
All the above scenarios lead to an empty slurry store and money tied up in a now non-productive investment that cannot be sold or moved, unlike machinery or land.
TAMS and all its predecessors have played an important role in animal welfare, farm safety and improving agriculture’s effect on water quality through greater volumes of nutrient storage.
A 70% grant rate for the creation of additional storage on non-dairy farms is tying up assets on that farm that may not be productive in a few short years, and will not see a return on investment for many years.
There’s also the argument as to why we would be creating stores on these farms and not the livestock farms that require them.
Current exports of slurry are generally agitated and sucked from the livestock farmer’s tank and immediately spread on to tillage land, cutting out the need for a second agitation or further drawing of slurry that we see in the above example.
So why would we build storage on another farm only to double the machinery effort to spread it?
If there’s a need for additional slurry storage, grant aid should be targeted at the farmer producing the slurry.
The Department has already implemented the rule for the Dairy Equipment Scheme tranche of TAMS III that an additional 10% storage above and beyond the minimum requirement must be installed before any grant aid on milking equipment is given.
So, is there a need for additional storage on dairy farms or not? The likely answer is, yes, so any increased grant aid should be targeted at these farms.
Why would a tillage farmer put their hands in their pockets to create slurry storage that is seen as a derogation farmer’s problem when they can easily purchase their required nutrients in granulated form as artificial fertiliser.
A more welcome element of Budget 2024 regarding slurry storage is a separate investment ceiling for creating storage, similar to what was done for the Solar Capital Investment Scheme (SCIS)of TAMS III.
While the exact ceiling rate is yet to be revealed, what it would essentially mean is that farmers could create slurry storage that would not affect their level of spend on other investments in TAMS, such as animal housing, handling facilities, etc.
This is a good move on the Department’s behalf and one of the more positive elements of Budget 2024.