The vital food sector deserves all our respect
Last year food and drink exports expanded by 9% to reach almost €10bn. Since 2009, exports have expanded by 40%. No other sector of significance has managed that sort of growth since 2009, and consistent with the hype, the agri-food sector is proving to be a shining light in the Irish economy. This is very good news for a sector that accounts for over 160,000 direct jobs in the economy, with many more indirect jobs supported.
Furthermore, it is a high value-added indigenous industry that has a low import content and which is an essential part of regional economic growth in a country where the greater Dublin area tends to dominate economic life.
It is interesting that the UK is still by far the largest market for food and drink exports, accounting for 42% of the total, while continental EU accounts for 32%.
Over the years we have heard much debate in this country about the need to reduce our dependence on the UK market and achieve greater scale in the rest of the EU, the US and more exotic markets like China.
This is all very sensible at one level, but the reality is the UK is the easiest market for Irish exporters to sell into. UK consumers have similar tastes in food, there are no language barriers, culturally we are similar, geographic proximity is important for transport costs, and of course there is a large Irish diaspora in the UK.
Hence, the UK market needs to be cherished and developed further. This is not to suggest that markets outside of the EU should be ignored.
On the contrary, regions such as China, Africa, the US, and the Arab world offer enormous growth potential, but we will have to work considerably harder to penetrate those markets than is the case with the UK.
It is great to see the agri-food sector now getting the recognition and appreciation it deserves. The recent activities of companies such as Glanbia, Flahavans and Dawn Meats are a shining example of the potential to build innovative and dynamic domestic firms.
Amidst this good news, certain events in the run up to Christmas were quite disturbing.
Some large retail multiples engaged in a fruit and vegetable price war with products such as carrots, onions, potatoes and sprouts being sold for as little as 5c per kilo. There is no way these products could be produced for anything like that cost, and the longer-term consequences of such activities are potentially awful for small food suppliers in particular.
I was astounded to see the head of the National Consumer Agency vigorously welcome the despicable actions of the multiples. She was quoted as saying that nobody has “proved that there has been a downside” and that “lower prices are good for the consumer”.
This is an incredibly short-sighted and very limited view of the world.
Firstly, the consequences of what happened before Christmas will only be seen over time as smaller producers and independent retailers are forced out of business.
Secondly, if price is regarded as the sole criterion for consumer welfare, then god help consumers.
Surely, the NCA must recognise the link between price and quality. If food is devalued to the extent we saw before Christmas, then the quality of food will inevitably suffer. The BSE crisis in the UK and the horsemeat scandal last year should serve as strong reminders of what an aggressive cheap food policy can lead to.
I saw a photograph from Dungarvan earlier this week of farmers picking carrots in Ardmore in the midst of a gale on Monday, and it struck me forcibly just how much disrespect some retail multiples and the NCA show for such people. It is totally unacceptable.
Thankfully our minister for agriculture has a different view of the world.
