The Central Statistics Office (CSO) has released a ‘Value Chain Analysis’ of Ireland’s agri-food sector, finding that almost half of all reported agricultural profits are from EU funds.
The CSO figures, which are based on the year 2018, show that food and drink production is worth in excess of €25 billion to the Irish economy.
Irish-owned firms produced €9.8 billion of this €25.7 billion, while €15.9 billion was produced by foreign-owned enterprises.
The largest output from Irish-owned food producing firms was dairy products at €3.4 billion, which is almost a third of domestic firms’ production of food and drink.
Food and drink products produced by Irish-owned firms were exported to 159 countries, with 44% going to the UK (pre-Brexit).
Household consumption of food and drink in Ireland was €10.5 billion in 2018, of which approximately 51% was imported.
The CSO’s publication, which was released today (Tuesday, April 27), is categorised as a ‘CSO Frontier Series Output’.
For that reason, the CSO warned that “particular care must be taken when interpreting the statistics in this release”.
“The CSO Frontier Series may use new methods which are under development and/or data sources which may be incomplete, for example new administrative data sources.”
The CSO says that publishing outputs under the Frontier Series allows it to “provide useful new information to users and get informed feedback on these new methods and outputs while at the same time making sure that the limitations are well explained and understood”.
According to the statistical agency, the report highlights the “globalised nature” of the value chain for agriculture, food and drink in Ireland, in terms of both exports and imports.
“Ireland has large imports of food and drink, and large investment here by foreign-owned food and drink producers, but also notable inflows of income from exports and dividends from foreign subsidiaries of Irish-owned multinational enterprises [MNEs],” the report states.
“The food and drink value chain is correspondingly highly exposed to outflows. It relies on markets in other countries for exported goods, and households consume large volumes of imports.”
As an example of this, the CSO highlights that household consumption of food and drink was valued at €10.5 billion in 2018, of which approximately 51% was imported.
This expenditure by households included €1.2 billion in product taxes (less subsidies) and €2.8 billion in wholesalers’ and retailers’ margins.
Ultimately households, as employees or farmers – and also as consumers – are affected by the agriculture and food value chain, according to the CSO.
In terms of value of Irish agricultural produce, this stood at €8.7 billion in 2018, the majority of which was cattle produce and milk produce.
The biggest purchasers of this were Irish-owned food and drink manufacturers, with smaller proportions of farm produce also sold directly to households or directly exported.
Commenting on these findings, Michal Connolly, senior statistician with the CSO, said: “The initial impact of Brexit on this value chain is very evident in the analysis presented today.
“The importance of the British market as a destination for exports of food and drink companies and as a source of food and drink imports for the Irish retail sector is clear,” he added.
He also noted: “Although the Irish food and drink value chain is highly globalised, there is still a major concentration of activity with Britain, accounting for 23% of exports of these products in January and February 2021, down from a concentration of 33% in January and February 2018.
“Imports from Great Britain account for 18% of food and drink total imports in the same two-month period in 2021, down from 41% in 2018.
“As more data becomes available later in the year, it will become clearer as to whether this is an initial Brexit shock, or if the Irish food and drink value chain is truly moving away from its dependence on Britain,” Connolly concluded.