Agri output in Ireland increased by over 26% in 2022 with gross output reaching an unprecedented level of €12.1 billion, according to the Central Statistics Office (CSO).
This tremendous increase in output value is particularly impressive given the huge increase in input costs in 2022 as indicated by the intermediate consumption figure which increased by over €1.5 billion compared to 2021.
More detailed analysis by the CSO shows that fertiliser costs increased by a whopping 141% and feedstuffs by 35%.
Again the detailed analysis also indicates that fertiliser usage was reduced by 19%, which will very clearly reduce the emissions impact from the sector.
As the table below from the CSO shows, the major drivers of output value increases were the cattle and milk sectors. Milk volumes were pretty static over the year but price increases saw output value increase by over €1.5 billion.
Cattle output value, again mainly price driven, increased by almost €600 million.
This increase in output value is all the more remarkable when you look at the figures for 10 years ago as set out below.
In the period before milk quotas were abolished, agri output value averaged in a range from €6.5 billion to just over €7 billion.
There are a number of remarkable aspects to this phenomenal increase, that probably set them apart from other Irish economy indicators.
The first is that this increase in expenditure is annual and cumulative and so the agriculture sector has now added almost €30 billion in increased output value since 2014.
Indeed, annual Irish economy expenditure from the dairy and meat sectors alone now amounts to in excess of €10 billion.
And with an Irish economy multiplier impact of 2.02, this increase in economic activity in rural and regional Ireland, since milk quotas have been abolished, is both unique and substantial.
Irish agri output
The fact is that Irish agri-food activity drives a huge part of the real Irish economy.
That is not to dismiss, in any way, the contribution of foreign direct investment (FDI) – particularly in the Corporation Tax context.
But, unlike with the FDI sector, we don’t have to marvel at the increases in billions of value reported, while at the same time struggle to assess what the trickle-down impact on real Irish economy might be.
Because official CSO assessment of the FDI sector impact suggests that its Irish economy multiplier is 0.10 – for every euro of turnover, only 10c is actually spent in the Irish economy.
A key issue for the agri sector and the Irish economy is: How sustainable are these increases in output value? Is 2022 a one-off because of the unique combination of war in Ukraine, energy supply crisis, post-Covid-19 inflation pressures etc.?
This is extremely hard to assess with any surety even though a lot of the forecasters would say that markets look to be relatively benign going into 2023.
As mentioned in my last opinion article, I would suggest that government and its agencies, challenged by some of the job losses and output reductions in the FDI sector, would at the very least open up the proposed assessment of Irish enterprise policy to include the agri sector.
It would be ridiculously close-minded not to.
Investment and innovation
One of the ways in which the value of the agri sector can be sustained is through investment in innovation, which has been well analysed in the Food Vision 2030 process, by state support for investment in the development of sustainable energy capability from the agri sector.
What I would also suggest is that an objective analysis of the performance demonstrates that Ireland’s agri-food sector, from farm to fork, shows a capability and resilience that consistently delivers sustainable economic impact, considering Covid-19 disruption and Brexit impacts.
The reality of this increase in value is that it is both supply and increasingly global demand driven.
It seems more than ironic that, as has been said repeatedly by the agri sector and its agencies, Ireland’s grass and livestock-based food offering is seeing increased demand, not least because global consumers get the sustainability profile and performance of our agri offering.
In contrast, if past performance is an indicator of future outcomes, large parts of the ‘public debate’ in mainstream media will continue to ignore the stellar economic performance of the Irish agri sector and continue to promote a mix of homespun, anti-export, pro-vegan propaganda solely focused on promoting the delusional belief that supressing Irish agri output will make us all purer.