You are viewing the content for Monday 14 September 2009

Cuts ‘will undermine agriculture’

A NATIONAL strategy needs to be put in place for the Irish agri-food industry before it goes the way of the coal miners in Britain, the Agricultural Science Association annual conference was told in Dublin.

The conference also heard that farming cuts imposed by the Government and proposed by An Bord Snip will seriously undermine the positive contribution of agriculture to the economy and will lead to 12,000 job losses in rural areas.

Economist Jim Power, who called for the national strategy, said Ireland has neglected to properly develop and exploit its "food island" reputation and has created a basic commoditised and relatively low-value industry. He said the economic downturn has created intense challenges for rural communities as jobs in construction and in traditional manufacturing activities are being shed, while at the same time farming is experiencing difficult times.

"Farming was a victim rather than a beneficiary of the Celtic Tiger period because it had toaccept all of the higher input costs and did not see a commensurate increase in output prices.

"It had to compete with the booming and cash rich construction sector for labour and other inputs and simply could not," he said. Mr Power, chief economist with Friends First, said the only benefit to farmers from that period of growth was the ability to sell sites and development land atexorbitant prices. "The demise of the Celtic Tiger is resulting in lower input costs and a greater availability of labour, but the potential to sell land has been seriously undermined," he said.

Mr Power said the farming sector is now in the midst of its own recession and there is not a lot of light on the horizon. A further complicating factor is that many farmers who decided to engage in off-farm investment have not fared well and forced sales of farms are becoming more common. He said the move by certain retailers, such as Tesco, to change their sourcing policies is potentially disastrous for the Irish agri-food industry and cannot be allowed by legislators.

Mr Power said the overall industry will have to become much more aggressive to survive, because all market forces are currently acting against it. Further consolidation, particularly of dairy processing, is inevitable. Gerry Gunning, executive secretary, IFA Rural Development Committee, said the farming cuts and Bord Snip proposals, leading to 12,000 job losses, do not make sense when account is taken of their impact on agriculture and the rural economy.

Irish farmers provide raw materials for the agri-business sector worth €8.2 billion in exports, which supports 300,000 jobs.

Mr Gunning said farmers’ incomes are already under huge pressure and government cutbacks are contributing to an expected fall in farm income this year of up to 25%. "The way out of the economic recession is to allow the productive and exporting sectors like agriculture achieve their full potential," he said.