Addressing labour-supply shortages, low margins, and lack of succession is key to ensuring that the field-vegetable sector in Ireland remains viable.

And investing in, and adopting, new labour-saving technology and machinery are critical to the sector staying competitive.

That is according to the publication today (Wednesday, July 13) of Opportunities for the Irish horticulture sector, a report by KPMG and commissioned last year by Minister of State at the Department of Agriculture, Food and the Marine (DAFM), Pippa Hackett.

The comprehensive report provides an overview of Ireland’s horticulture sector, which is the fourth largest within agriculture, and has a farmgate value of €467 million (2020).

For the purposes of the KPMG report, the Irish horticulture sector comprises seven sub-sectors:

  • Field crops;
  • Protected crops;
  • Soft fruit;
  • Top fruit (primarily apples);
  • Amenity;
  • Potatoes;
  • Mushrooms.

Sector overview

An overview of the field-vegetable sector, according to the report, shows that there are 200 growers in Ireland, employing around 856 people. With a farmgate value of €80 million, this sector represents 17% of the total value of horticulture in Ireland.

Rising input costs and low margins were singled out as the main constraints to the sector, and a number of growers who contributed to the report stated that they would either stop production, or reduce their acreage.

One grower was quoted saying: “Overall there will be a reduction in the line of 25% with certain crops reduced by as much as 50%.”

According to the report, the largest 50 growers account for 75% of total field vegetable production area.

Carrots, broccoli and onions are among the top best-selling produce areas in Irish retail, and they are also key imported product lines.

Labour-supply issues are concerning, and considered a “weakness” within the sector as there is a reliance on work permits and visas for migrant workers.

Rising input costs are a threat to the viability of the sector, with labour being the single biggest input cost, the report found.

Low margins making re-investment difficult are particularly constraining for vegetable growers, forcing them to exit the business and, therefore, reduce the local supply range.

And with insufficient young people entering the sector, succession is a key issue to address and resolve.

Field vegetable sector SWOT analysis

KPMG conducted an analysis of the sector’s strengths, weaknesses, opportunities and threats (SWOT) and revealed that, despite the negatives, there are many positives.

Strengths

  • The top best-selling conventional field vegetables are carrot, onion, broccoli, and celery, with organic sales strong where Irish supply is available (e.g. organic carrots have very strong sales);
  • Potential to develop Irish supply of best-selling field vegetable lines to support import substitution;
  • Ireland is 60% self-sufficient* in terms of vegetable supply.

Weaknesses

  • Fragmented production base with around 200 growers across counties Dublin, Meath, Wexford and Cork – largest 50 growers account for 75% of total field vegetable production in terms of area;
  • Increasing costs of production (costs increased by around 12% between 2020 and 2021) and labour-intensive methods in place (labour costs represent around40% of production costs);
  • Labour-supply constraints.

Opportunities

  • Potential to substitute some imports of vegetables (e.g. onions, broccoli, celery, cauliflower, cabbage, courgette) with local supply;
  • Develop additional varieties/domestic supply to meet local demand;
  • Adoption of best integrated pest management (IPM) practices to build on high-quality produce image and meet customer demands;
  • Leverage increasing health conscious consumer trends to strengthen brand positioning;
  • Improve quality and supply of a range of varieties over maximum season.

Threats

  • Increased competition from imported vegetables;
  • Rising input costs are a threat to the viability of the sector;
  • A lack of investment in automation. Adoption of new labour-saving technology and machinery is critical to the sector staying competitive;
  • Low margins make re-investment difficult, threatening the longer-term viability of the sector;
  • A lack of succession as not enough young people get involved in the sector;
  • A concentrated market of branded retail chains selling produce.

Ambition for the future

The report recommends a number of actions to be taken in relation to finance, policy, new product development.

These include but are not limited to:

  • Establishing a dashboard for horticulture input costs, tracking it over time, and supporting knowledge transfer and advisory services;
  • Develop research programmes and support greater resourcing for advisory services on vegetable production;
  • Develop insight to understand the sector’s needs, the supply chain players and network;
  • Assess and analyse opportunities for alternative routes to market.
  • Engage with Enterprise Ireland and the Department of Trade, Enterprise and Industry (DETE) in relation to securing funding;
  • Facilitate adoption of labour-saving technologies.
HORTICULTURE REPORT