Productivity of food sector needs to be repeated at primary level
A recent report by the EU Commission highlights that Ireland’s food industry workers are the most productive in the EU.
This is a feat that should be recognised as a significant achievement and demonstrates the expertise and innovative excellence which enables workers in the sector to punch above their weight internationally.
The food-processing sector, which includes beverages and tobacco, remains among our most vital indigenous industry particular in rural Ireland where employment is at a premium.
Companies such as Glanbia, Dawn and Kerry are world leaders in their fields and as a result of investment and innovation their success in traditional areas has been added to by global success in ingredients, infant formula and other functional and prepared consumer foods.
It must be remembered that Ireland was not always a front runner in this area. A recent Forfas report highlights that the overall performance of the sector in Ireland has been impressive in recent years, rising from slightly above the Eurozone average in 1980 (€8) to a level comparable with Denmark and the USA by 2007 (€32).
However, that same Forfas report highlighted the two-speed nature of the sector with a big difference in productivity levels across primary agriculture and food-processing.
Productivity levels in primary agriculture are low relative to other sectors in Ireland, at less than €18 per hour in 2007 compared to an economy-wide average of just over €42. While this can be explained to some extent by endemic structural issues in the sector such as farm size, most will concede that poor technical performance and uptake of best practice is also an issue.
It is critical that Ireland remains competitive in food industry at both primary production and processing levels. The industry at primary level should look its counterparts higher up the chain as an example of how productivity levels can be improved when the desire to do so is evident.
The problem calls for more effort on the part of the industry to use its knowledge and expertise in a constructive way to improve performance at primary level.