Agriculture in Ireland
Agriculture and food is an important industry in Ireland.
Currently farmers make up almost 7% of the workforce. When employment in inputs, processing and marketing is included, the agri-food sector accounts for almost 10% of employment.
The agri-food sector (including agriculture, food, drinks and tobacco) accounts for around 8% of GDP. Primary agriculture accounts for 3% of GDP.
Agri-food exports have an 8.5% share of total exports.
However, when the low import content of agriculture and the low repatriation of profits are taken into account, the agri-food sector still accounts for around 25% of net foreign earnings.
Land Use
- Irish agriculture is primarily a grass-based industry.
- The land area of Ireland is 6.9million hectares, of which 4.4million hectares is used for agriculture or about 64% of total land area and 650,000 hectares for forestry or about 9.4% of total land.
- 80% of agricultural area is devoted to grass (silage, hay and pasture), 11% to rough grazing and 9% to crop production.
- Beef and milk production currently account for close on 60% of agricultural output at producer prices.
Farm Structure
- There are around 130,000 farmers in Ireland.
- Figures for 2002 show that 13% of farmers are less than 35 years old, 46% between 35 and 55 and 21% between 55 and 65 and 20% over 65.
- In common with trends in all EU member states, farm numbers in Ireland declined continuously over recent decades. The average annual decline during the past 10 years was 1.7%. This compares with an annual decline of almost 3% in other EU states. However the decline in the number of small Irish farms has been more rapid – over 5% per annum for farms less than 5 hectares. The number of larger farms increased slightly resulting in average farm size increasing from 27 hectares to almost 30 hectares during the past decade.
- Average farm size is 32 hectares with almost 50% of farms less than 20 hectares.
- According to the Teagasc National Farm Survey, on 35% of farms the farmer combines farming with an off-farm job. On 48% of farms, the farmer and/or the spouse have an off-farm job. Farmers with off-farm employment are predominantly involved in cattle or sheep farming.
- When other sources of farm family income, such as pensions and social welfare, are included, the Teagasc National Farm Survey shows that just 30% of farm families rely on farming as their sole source of income. However, farming remains a critical source of income on a large number of part-time farms and the maximisation of farm income through improved technology and quality production is a key national objective.
Farm Income
● The recent Household Budget Survey showed that almost 60% of farm household income now comes from off-farm sources. Farm households had a weekly disposable income of €160 per household member compared with €149 for non-farm rural households and €195 for urban households.
● The Teagasc National Farm Survey provides detailed information on farm incomes, costs, output and other key data each year. For the most recent report, click here.
Main Commodities and Exports
- The contribution of agriculture to the Irish economy, at 3% of GDP, is twice that of the EU average. Agri-food exports account for over 8% of total foreign earnings.
- Beef and milk production account for around 60% of agricultural output. Tillage and horticulture account for 14% of output while pigs and sheep account for 6% and 5% respectively.
- Ireland exports nine out of every 10 beef animals, making it the largest beef exporter in the EU and one of the largest in the world.
- Dairy exports account for 75% of total production while 60% of all sheepmeal is exported.
Beef
- In 2002, Ireland exported 445,000 tonnes of beef worth €1,185 million.
- In 2002, 126,000 cattle were exported live from Ireland worth €70 million.
Sheep
- In 2002, Ireland exported 41,000 tonnes worth €160 million. France is the main market for Irish sheepmeat exports, with approximately 80 per cent of total exports going there in 2002.
Pigs
- In 2002, Ireland exported 129,000 tonnes (product weight) worth approximately €270 million.
- In 2002, the UK was the main market for Irish pigmeat taking approximately 49% of our total exports. Continental EU markets accounted for 34% of our pigmeat exports while the remaining 17% went to international markets.
Dairy
- In 2002, total Irish milk output amounted to 5,359 million litres.
- Of the total milk output, 519m litres was used for liquid consumption while 3,109m litres was used in the production of butter, 1,172m litres was used in the production of cheese, 219m litres in the manufacture of cream, 210m litres in whole milk powder production, 80m litres in chocolate crumb production.
- In 2002 the Agri-food industry’s annual output rose to over €16billion and had exports valued at €6.7billion.
Agricultural Economics
As with any other sector of the economy, the principles of economics are applied to farming. The farm is treated as a business unit. It involves identifying the best possible allocation of resources on the farm in order to satisfy an objective, usually profit. This involves recording, accounting, analysing, planning and budgeting.
The farmer identifies the most efficient management of land, labour, time, machinery, animals and money based on production costs and the prices he/she will receive for produce. For agribusiness he/she must decide the quantity of a product to produce, the price to sell it at and the markets it should be sold in.
Economics for the farming industry as a whole is concerned with economic growth (both the contribution of farming to growth and the effect of growth on farming), farm incomes and state aid.
Farming accounts for 3% of gross domestic product, 7% of total employment in the country and 6% of all exports leaving the country. If the food processing industry is included then it increases the importance of agriculture to Ireland’s economy. The agri-food sector accounts for 8% of gross domestic product, around 10% of employment and around 7% of total exports.
In 2002, on average dairy and tillage farmers earned an income higher than the average industrial wage, i.e. the average wage paid in factories. Cattle and sheep farmers earned less on average than the industrial wage. It should be remembered however that these are only average figures. Thirty five per cent of farmers are part-time and have jobs off the farm. Generally part-time farmers earn less than full-time farmers. If the calculations included fulltime farmers only it is possible that the results may look somewhat different.
On average, 75% of farm income is made up of direct payments. Direct payments are more commonly known as ‘cheques in the post’. They are payments farmers receive from the EU as compensation for poor prices.
The Common Agricultural Policy (CAP) direct payments system is the cornerstone of the 'European Model of Agriculture'. It maintains the maximum number of people living and working in rural communities, supports the production of safe food with high environmental and animal welfare standards while maintaining a pleasant landscape for the enjoyment of everyone.
