Any direct payments cut would have a dire effect

A report commissioned by the IFA and launched last week, entitled ‘The importance of the cattle and sheep sectors to the Irish economy’, shows the sectors are hugely important to the economy, and calculates that the €2.3bn output at farm gate level creates total output of €5.7bn.

The sectors support 100,000 farmers and more than 50,000 jobs in the wider economy.

The report, carried out by UCD professor of agriculture and food economics Alan Renwick, highlights the deeply embedded nature of the two sectors in the Irish economy in terms of their high spend on inputs and services in the local economy, and their very strong export orientation.

It identifies the significant geographical spread and important economic impact of the beef and sheep sectors. The sectors deliver a real return in every rural parish, generating economic activity and providing employment across the country.

Combined, the sectors have an unparalleled reach in terms of their contribution to the rural and wider economy. For example, analysis of cattle farming in Co Clare shows that 80% of the cattle output is sold in the county, and 90% of the inputs are sourced locally.

The report shows that cattle and sheep farming are low-income enterprises, averaging €8,000 (cattle rearing) and €12,000 (sheep farming) over the last five years. Direct payments are of major importance for farm output and income, representing over 50% of gross output and between 141% (sheep) and 177% (cattle rearing) of family farm income.

Direct payments in the cattle and sheep sectors deliver excellent value for money, with a strong multiplier effect. One of the key findings in this report is that each €1 of direct support for cattle and sheep farmers underpins over €4 of aggregate output in the economy.

The context for this report is the potential that exists for the expansion of the sector under ‘Food Harvest 2020’. That can only happen if the right framework is in place, which will allow primary production to grow. Conversely, a cut in direct payments would impact very negatively on both farm incomes and output. The report identifies the following: “Achievement of the Food Harvest 2020 targets for the cattle and sheep sectors could lead to an increase of €1.6bn in output in the Irish economy (based on estimates from FAPRI).

“In addition, estimates have been made that between 5,000 and 10,000 jobs would be created across the entire economy. This increase in employment represents up to 5% of the growth in unemployment since 2006. ”

“More substantial increases in cattle and sheep numbers of 25% and 20%, respectively, stimulated by an increase in final demand from the processing sector, could lead to a €4.9bn increase in total output.”

The pillars of the cattle and sheep sectors are the breeding suckler cow herd and the 2.3m ewe flock. Maintaining and supporting the 1.1m national suckler cow herd is vital in terms of producing the quality beef which enables the sector to secure the high-priced premium retail and food service outlets across the UK and Europe.

With 32,000 flock owners across the country, the sheep sector is the second largest enterprise at farm level, and is very important in terms of its economic and environmental contribution to rural areas, particularly in hill and mountainous regions.

The IFA has sent this important report to the Taoiseach, the minister for agriculture and the Government and we will be discussing it with them as the basis for underpinning the IFA’s campaign to secure a positive outcome to the CAP reform negotiations, and especially national co-financing under Pillar 2 Rural Development for the sectors. The clear message is that every euro spent is good value and a major stimulus to jobs, exports and the economy.

* John Bryan is IFA president