In 2005/2006 as the Doha round of World Trade Organisation (WTO) talks seemed set on an inevitable ‘giveaway trade’ deal that would sacrifice much of Irish agriculture and particularly its beef sector, the food sector, in conjunction with the Irish Farmers’ Association (IFA), looked at employment across the Irish economy on a ‘per county’ basis.
The interesting fact that this analysis highlighted was that in at least 16 of the 26 counties in Ireland at the time, farming and agribusiness were the biggest employer.
This was huge news to the modern economy bodies and a government at the time which had just jointly declared agriculture to be a sunset industry!
Irish industrial development policy
As luck would have it, the Doha round talks collapsed and the real Irish economy was saved, to play a huge part in the post-2008 economic recovery.
Given the very significant growth in the agri-sector since 2015, driven by but not exclusively confined to, the post quota dairy sector, I would suggest that this 16 out of 26 figure is not far off the mark currently.
The general ignorance around agriculture’s unique relevance and impact on the Irish economy continues; unfortunately in 2021 deriving, at least in part, from the inclusion of the profits of multinational companies in Ireland’s official GDP figure – a figure of €160 billion in 2019.
As per the Eurostat chart below, removal of the profit transfers/flow through money, means that Ireland’s rank in the EU economies goes from second on a GDP basis to 11th, based on actual income consumed.
Whereas Ireland’s GDP figure is currently 193% of the EU average, the AIC figure is 95% of the EU average.
This reality is meaningful, not just in determining how a Minister for Finance frames a budget (on the lower figure not the GDP one), but clearly on a reality-based approach as to what economic activity drives employment and exports in the Irish economy versus what is pass-through, light-footprint impact.
The chart below, from the Department of Enterprise, Trade and Employment (DETE), better encapsulates this economic footprint difference.
While the Foreign Direct Investment (FDI) sector has sales/exports of €230 billion through the Irish economy, its actual spend in the Irish economy is €23.5 billion.
For the indigenous Irish-owned sector (of which the agri-food industry is almost 60%), exports are €23 billion, while Irish economy expenditure is €26 billion.
Very clearly, increased economic activity in the indigenous sector benefits the Irish economy to the tune of 10 times per euro of exports, versus the increases from the multinational sector.
So yes, the multinational sector is important, but its Irish economy footprint is smaller than the indigenous sector. From an agri-food sector perspective, there is no argument with the multinationals and indeed many benefits clearly.
Agri-food sector
Where there is concern, is that general ignorance of the formal accounting process leads to a tendency to dismiss or even giveaway (as per Doha 2006) the indigenous agri-food sector.
The 2021 threat to agriculture in this regard, may come from a very different ideology.
Not from globalisation in favour of emerging agri-food exporters like Brazil but is still biased in terms of misunderstanding of economic impact, but a distorted tribal characterisation of current Irish agricultural output, that refuses to acknowledge local economic worth or global demand issues.
Last week saw the publication of legislation – the Climate Action Low Carbon Development Bill 2021 – and policy – the Rural Development Plan 2021-25.
These should, in conjunction with the Foodwise 2030 report, shape the pathway to a carbon-free Irish economy, while also setting out the key drivers of the future of the Irish agri-food sector, the rural and regional economy and thereby also the future development of the whole Irish economy… perhaps.
Quite a lot to digest in all of that and also in fairness a lot of consultation to be assimilated and processed.
Investment in agriculture
While there is rightly a focus on the need for improved infrastructure such as broadband as a fundamental asset, albeit very lately recognised, in underpinning rural and regional economic activity, and significant focus on tourism development, the specifics of how economic activity associated with agricultural output is to be supported beyond the CAP supports, are very sketchy.
So from an agri-food industry and farming perspective I would be hugely concerned about the lack of focus or detail on investment supports, job creation and job maintenance directly related to agriculture and food processing in the Rural Development Plan.
This concern relates particularly to the reality set out above in terms of agriculture’s overall Irish economy impact and also particular dependence of rural counties in border areas on agri-sector jobs.
Perhaps this omission derives from general ignorance of the true GDP figures and anomalies as before.
If so, the government should look at its own analysis through the Central Statistics Office (CSO) and DETE.
I would hate to think that this omission is because it is impossible to look at any meaningful assessment of rural economy activity without looking at how the meat and dairy processing sectors can be supported, to add value and support employment on and off-farm.
This reality does not fit with the plant-based-only future set out by the Environmental Pillar and the NGOs whose ideology seems to be driving government policy at the moment.