Food for thought in jobs’ strategy submission
Food and Drink Industry Ireland (FDII), the IBEC group that represents the sector, has in its submission to the government 2020 Strategy on the future development of the agriculture, forestry, fishing and food industries called on it to deliver and implement a coherent and coordinated strategy with industry to put the food sector at the very heart of the Irish economy.
This makes absolute sense and it’s a welcome move by the country’s leading employer body to demand a fresh strategic thinking on agriculture and food.
This is a sector that creates €20 billion in value annually and accounts for €8bn in exports every year and over 200,000 jobs, directly and indirectly.
The call by the FDII also puts a fresh focus on the role played by Irish agriculture in the life of rural Ireland and in the well-being of the economy.
Without milk, meat cheese and food ingredients delivered to the highest quality the ability of the food and drinks sector to perform on the international stage would be severely restricted.
Full marks to the farming community for that contribution.
In recent years the drive for property gains and the huge focus on foreign direct investment meant that those inside the farm gate became second class citizens to a certain extent.
At one point agriculture was 50% of this economy, but its power diminished as the economy discovered the transforming power of US multinationals and other forms of business opportunities, all of which have been hugely beneficial.
But it has been a view expressed in this column for some time that we need to lessen our dependance of FDII for strategic reasons.
Those companies account for 75% of total exports and, while major contributors to our economic evolution, they have no huge emotional attachment to this economy or Ireland.
Their attraction to us is our low corporation tax and the fact that we provide easy access to Europe and other markets outside their US home base. Companies like Wyeth and Intel are major players in their local economies, but have no real deep connection with this country.
That’s not their fault. We invited them in and are very glad to have them.
The pharmaceutical firms located here are also important and are big contributors to our economy in many varied ways like most of the foreign firms who have bases here.
But their commitment to Ireland is contingent on a number of factors, not least the 12.5% tax regime.
If that changes a huge number will be gone, and a recent piece of research showed that in nett terms the number of jobs contributed by foreign-based firms has not increased by much over the past 10 years.
We will watch with interest to see if Intel puts its next major chip plant into Israel or Ireland.
Dell left Limerick with the loss of thousands of jobs. We warned about their impending departure and were told off for upsetting the company’s loyal workforce.
Well loyalty counted for little in the end. Business will migrate to where it can best deliver profits to reward investors.
The fear is that the multinational sector could get very mobile if Europe moves to a standard corporate rate regime, or if India and Israel start to outclass us.
We need to reexamine what we want to achieve for ourselves and the economy.
The 2020 Strategy offers an opportunity for us to nurture a sector that has the potential to ensure long-term economic prosperity across the island.
