Rural researchers keep lid on euphoria

Eamonn Pitts reports from a recent Teagasc/National Rural Network conference on prospects for development of the rural economy

FOR people in danger of getting carried away by euphoria at agricultural prosperity, the rural development conference organised recently in Athlone by Teagasc and the National Rural Network was sobering.

Not only was it seen as unlikely that the long-term decline in farmer numbers will be reversed, but experts said growth in Ireland is likely to follow the same underlying principles as elsewhere — it will be predominantly urban.

Agricultural employment will at best stabilise, the conference was told. Commercial farming will continue to play an important role in particular areas.

Rural prospects are not encouraging for the areas that lack a strong commercial farming base. Limited scope for developing alternative employment is seen in such areas, because they suffer from a range of structural deficits that cannot be easily addressed (such as high average age, low population, relative remoteness, poor urban structure).

Agriculture does have a strong future, but farmer numbers will continue to fall, said Dr Edgar Morgenroth of the Economic and Social Research Institute.

So, the mismatch between the population and jobs is set to continue. In 2006, 42% of the population but only 31% of jobs, were in rural areas. Most of the jobs, and most of the highest-value, highest-wage jobs, tend to be in urban centres.

Just 22% of the jobs in rural areas were in agriculture, forestry, fishing, food and beverages and tourism. A further 18% were in construction. Rural areas accounted for 50% of Ireland’s construction employment — which has shrank by almost 60% since Census 2006.

What that means on the ground can be seen in the Trim social welfare office in Co Meath where the number of males registered increased more than five-fold between 2006 and 2011.

A relatively high proportion of the Meath labour force (14% compared with 11% nationally) in 2006 was engaged in construction. So it suffered proportionately more than other areas from the collapse in the building sector.

Average earned income in Co Meath per household from employment, farming and other economic activity declined by 9% between 2006 and 2011. After taking account of social welfare benefits received and taxes paid, disposable income per household declined by 4.3%. The decline in household incomes in many areas west of Trim was over 20%. The proportion of households with incomes below 50% of the national average (a notional poverty line) rose from 4.1% in 2006 to 6.6% in 2011.

The highest rates of employment were now in the south-east of the county, which is part of the Dublin labour market. Household incomes in areas closer to Dublin are higher, and there is a clear pattern of decline as one moves north and west.

The proportion of males in employment fell from 73.7% in 2006 to 56.8% in 2011. The decline in female employment in this recession period was much less, falling from 52% to 48.4%.

The impact of the recession in Co Meath was described at the Athlone conference by Jason Loughrey. The findings come from Teagasc research in collaboration with five LEADER groups (Meath, Clare, West Cork, Clare and Ballyhoura), to measure the impact of economic and policy changes in these rural areas.

Ivan McCutcheon of the West Cork Development Partnership showed (quoting UCC economists Declan Jordan and Justin Doran) that the south west has appeared to be more resilient to the recession than other regions. Areas in west and south Cork and Kerry had the lowest unemployment levels in 2010, while the highest levels were in Donegal (no change from historic patterns), the Wexford/Waterford region, and some midlands areas.

The necessary jobs won’t come on farms, explained David Meredith of Teagasc. Reduced farm numbers mean less employment, even if it is accompanied by specialisation and intensification which lead to increased inputs and outputs — with beneficial multiplier effects locally, but not in the form of jobs. Employment in farming had declined from half a million in 1951 to under 100,000 in 2002, and less since. In 1986, the proportion of the labour force engaged in farming exceeded 35% in many parts of Cork and Kerry. By 2006, in no part of the country was the proportion greater than 20%, and in most rural areas, it was less than 10%.

There were 25% fewer farm holdings in 2007 than in 1991, with a corresponding increase in farm size. The land base, however, was becoming increasingly fragmented — not good for productivity.

Cap proposals could have been much worse

NOT a bad result for Ireland was the verdict at Athlone from Professor Alan Matthews of Trinity College on the European Commission’s proposals to reform its agriculture policy. He pointed out that the cut in overall funding for agriculture and rural development was relatively small, at only 4% (but funding would over time be eroded by inflation).

The overall budget had been almost maintained by including a “greening” element. We should not expect to “gut” the greening elements and retain the overall size of the budget.

He agreed that the move to a standard direct payment per hectare will transfer payments from more intensive to less intensive farms. States also have an option to reserve up to 5% of the total for areas with natural constraints. The Government would have to decide, on a rational basis, how many regions, and what the average payment per hectare would be.

By 2014, 80% of the payments within a country must be on a regional basis.

Professor Matthews said the incomes of efficient farmers could be reduced by the proposal, but research in this area suggested it would reduce overall production.

However, some delegates pointed out that farmers’ access to borrowed capital was influenced by their level of direct payments, and reduced access to capital could reduce production potential.

Professor Matthews quoted European Commission estimates that the measures for “greening” agriculture will add €32 per hectare (an increase of 2%) to farming costs, on average across the EU.

But the cost increase could range from more than €100 per hectare in Netherlands, Slovenia and Belgium to only €20 in many member states — including Ireland, where only 17% of farms would be expected to incur any “greening” cost.

In his address to the Athlone Conference, Professor Gerry Boyle, Teagasc director, said the proposed funding for the rural development component of the CAP is close to historic funding levels. The key elements to be funded include fostering green growth through innovation, supporting rural employment, maintaining the social fabric in rural areas, and improving the rural economy through diversification. Two elements of the existing rural development programme would be compulsory, the LEADER programme and agri environment measures.

Rural walk trails a boost for tourism

TOURISM’S role in rural prosperity is illustrated by figures for local expenditure for walkers and hikers.

Visits to walking trails by Irish visitors are estimated to have generated about €280m in local expenditure in 2010, with an additional contribution of €150m from foreign hikers and walkers.

These estimates were presented to the Athlone conference by Cormac McDonnell, National Trails Office, attached to the National Sports Council).

The conference heard how important walking tourism will be for the rural areas of south and east Limerick and East Cork.

Facilities have been built up there over 20 years, aided by Ballyhoura Development, which offers rural development programme grants for innovative rural businesses.

Trails now include two long distance walking routes, 14 loop trails, three heritage trails, a 4x4 trail, four cycling loops and a mountain bike trail centre, with five loops.

Nationwide, the number of recognised trails has grown from 72, covering 3,661 km, in 2005, to 549 accredited trails in 2011, of which 54 were cycling trails.

Picture: Attendees at the National Rural Development Conference in Athlone organised by the National Rural Network and Teagasc

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