The good and great assembled in Dublin Castle, deliberating at the Global Irish Economic Forum, to conceive new ideas for our economic prosperity.
Their creativity included establishment of a new social networking website worldIrish.com, tourism initiative The Gathering to welcome emigrants in 2013, expanded graduate schemes, unpaid service on state boards and diaspora awards scheme. It’s a pity they seemed oblivious to Ireland’s greatest strength — our natural resources — food and drinks. Ireland’s world-class brands include Guinness, Bailey’s, Jameson, Kerrygold. We are global leaders in food ingredients, infant formula and prepared consumer food products.
There was no mention of our indigenous industries’ global potential, nor any attempt to showcase our array of superb products to 70 million Irish worldwide. Preoccupation with global multinationals ignores the fundamentals of food security and net benefits to our economy. Take the IDA success story of Google, now employing 2000 people in European HQ in Dublin. Their 2010 accounts reveal on €10bn turnover, they contributed €2m in profits tax here. There are no repatriated profits from €24bn of output from agribusiness, seafood and timber sectors, delivering €9bn of exports.
HSBC’s global research unit, involving economists in 70 countries, produced The World in 2050 report. Their findings predict: world output will treble, while emerging states’ output will increase fivefold; 19 of 30 top economies will comprise emerging states && and China and India will be the largest and third-largest economies. Total world population will rise from 7 billion to 9 billion. They are going to be hungry.
Meeting demand for food is a crucial component of the global policy agenda. UN body, Food and Agriculture Organisation, projects a 70% increase in food production will be needed by 2050. Scope for extra areas for cultivation doesn’t exist due to erosion of ecosystem quality and climate change constraints.
The challenge of meeting nutritional needs will be met by improvement in yields, adapting crops, extra investment and productivity. High-quality healthy foods will be especially in demand amongst richer consumers. Ireland — the Food Island — enters a period of sustained unprecedented opportunity. Recently, EU Agriculture Commissioner Dacian Ciolos, published proposals to reform the Common Agricultural Policy, covering the period 2014-2020.The €387bn package involves annual expenditure of €55bn. Irish farmers will receive €1.3bn in direct payments. New measures seek to evolve a Common Environmental Policy, with 30% of entitlements based on ecological sustainability; a ceiling of €300,000 will apply to any single farmer and production limitations will be abolished, such as national milk quotas in 2015. When all of these factors combine, the market outlook for 150,000 people employed in the sectors has never been better. Four decades of positive price prospects for agricultural commodities beckon.
There are considerable challenges in realising this potential. We need to develop competitive advantage through a cohort elite to 30,000+ full-time professional farmers, who can produce clean, green, innovative, traceable produce. Allied to this must be a consolidated food processing industry that invests in additional capacity to achieve scale, matching retail giants. Sophisticated environmentally conscious consumer demands will pay a premium for added value. State agencies Teagasc, Bord Bia and Enterprise Ireland have to harness the best entrepreneurial talent, with reduced Exchequer support. This amounts to a national effort summarised in the vision of FoodHarvest 2020.
At farm level, there are serious structural imbalances. Our total land assets comprise 4.26 million ha. This is increasingly fragmented and overly dependent on rental arrangements, principally “conacre”, involving short-term setting of land on an annual basis. This prevents long-term investment in soil improvement and paddock fencing to maximise productivity. Family farm restructuring, through greater land sale mobility and long-term leasing, needs to ensure consolidation of holdings into the hands of premier operators. Producer groups need to be formed in the areas of horticulture and afforestation.
Despite marked improvements of 30 to 40% in milk and meat prices since 2009, farm viability is volatile and varied. One-third of suckler beef producers use their EU Single Farm Payments to subsidise enterprise losses. Average farm incomes were €18,000 for all farmers and €34,000 for full-time farmers last year. Key objective must be to secure a knowledge transfer to achieve best practice as common practice. Today, I address 900 staff of Teagasc in Kilkenny. They must achieve implementation of a change plan, which reduces staff numbers by 240, requiring integration between research centres, colleges and nationwide network of 300 advisory staff. Retirements and redundancies and redeployment must be secured, while maintaining effectiveness of frontline services.
Ireland’s cost advantage lies in grassland production. While subject to seasonality, it’s much cheaper than factory farming. Our 9,000 targeted producers can increase milk output from 5.5bn to 8.25bn litres over the next decade. This is dependent on issues such as optimal animal health and genetic improvement of cows. Downstream benefits of more milk production are increased numbers of calves for the beef industry and more processing jobs. . Commercially focused R&D is essential to product innovation and increased market share. None of this will happen through osmosis, it requires enunciation and stakeholder delivery of public policy.
In the beef sector, “genomics” is a new buzzword. Application of advances in genetics will allow production of better meat carcass quality in cattle and sheep. Better feed conversion ratios facilitate cost reductions. Reduced slaughtering ages mean less expense over the animal’s lifetime. Decline in the national sheep flock, despite Europe’s consumers requiring increased supplies, is due to labour related issues. These can be resolved by targeting incentives in fencing and handling facilities. Tillage, comprising 10% land use and 12,000 specialised farmers, needs more winter sowing, optimal fertiliser application, higher yielding varieties.
Ireland’s most credible success story does not require reinventing the wheel. We need to meet global demand for more processed food, dairy and beverages. Our diaspora can assist with investment and markets. With production shackles removed, we can unleash an extra €10bn of output that puts a premium on attributes of credibility, traceability, health and sustainability. We can maintain biodiversity, have ample supplies of fresh water, without threat of flooding or drought. The planet requires more “food, fibre, feed and fuel”. We can meet these demands with the lowest carbon footprint.
The Government is in the unique position to provide leadership and state support to convert 3,000 current agricultural college students into a fighting force for regional development in rural areas. Ireland’s opportunities in agriculture, aquaculture, horticulture, timber production have obvious net socio-economic benefits.
As public services retrench and rationalise through obligatory spending cutbacks, we must ensure in the march for modernity that we don’t forget that Ireland is first and foremost a clean, green food island.