Agriculture in Ireland
The Irish Agri-Food Industry
The Department of Agriculture, Food and the Marine (DAFM) currently reports the agri-food sector in Ireland contributes a value of €24 billion to the national economy, generates 6.3% of gross value added, almost 10% of Ireland’s exports and provides 7.7% of national employment. When employment in inputs, processing and marketing is included, the agri-food sector accounts for almost 10% of employment.
Contribution of the Agri-Food Sector to the National Economy
The agri-food sector is one of Ireland's most important indigenous manufacturing sectors, accounting for employment of around 150,000 people. It includes approximately 600 food and drinks firms throughout the country that export 85% of our food and seafood to more than 160 countries worldwide. Research has shown that Ireland’s investment in agriculture produces a far bigger return than investment in other sectors. That is because agriculture sources 71% of raw materials and services from Irish suppliers, compared to 44% for all manufacturing companies.
Data from the Central Statistics Office (CSO) indicates that the agri-food sector (including agriculture, food, drinks and tobacco) accounts for around 7% of GDP with primary agriculture accounting for around 2.5% of GDP.
|Contribution of the Agri-Food Sector to GVA in 2010||€m|
|Gross Domestic Product (GVA) at Factor Cost||140,383|
|GVA in Primary Agriculture, Fisheries and Forestry at Factor Cost||3,493|
|GVA in Food & Beverages Sector||6,150|
|GVA in Wood Processing||168|
|GVA in Primary Sector as a % of Total GVA||2.5%|
|GVA in overall Agri-Sector as a % of Total GVA||7.0%|
Employment in the Agri-Food Sector
Composition of Employment in the Agri-Food sector, 2011
Source: CSO QNHS Quarter 4, 2011
Agri-food exports have an almost 10% 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.
Irish food and drink exports grew last year by 12 per cent giving a 25 percent increase in two years and were valued at a record €8.9 billion. The Government's target is to grow this figure to €12 billion by 2020, which means continuous growth between now and then.
Agri-Food Exports 2010-2011
|Ireland Agri-food Exports 2010-2011||GB + NI|
|All Destinations||GB + NI||% of Total|
|SITC Section (1 digit) and Division (2 digits)||2010||2011||2011||2011|
|0 Food and live animals||6,982,912||7,851,202||3,446,331||43.9|
|00 Live animals other than animals of Division 03||338,680||353,585||219,934||62.2|
|01 Meat & meat preparations||2,407,389||2,759,293||1,321,067||47.9|
|02 Dairy products and birds' eggs||1,430,818||1,776,294||759,355||42.7|
|03 Fish, crustaceans, molluscs and preparations thereof||370,523||416,682||37,022||8.9|
|04 Cereals & cereal preparations||216,990||267,210||232,998||87.2|
|05 Vegetables & fruit||225,324||223,990||196,695||87.8|
|06 Sugars, sugar preparations & honey||81,593||87,907||30,771||35.0|
|07 Coffee, tea, cocoa, spices & manufactures thereof||260,852||279,328||130,657||46.8|
|08 Feeding stuff for animals (excl unmilled cereals)||188,575||212,701||184,119||86.6|
|09 Miscellaneous edible products & preparations||1,462,168||1,474,210||333,713||22.6|
|of which Infant food||589,837||611,338||129,481||21.2|
|1 Beverages and tobacco|
|Total food and live animals and beverages||8,100,150||8,937,235||3,793,911||42.5|
|Source: Bord Bia|
- Irish agriculture is primarily a grass-based industry.
- The Census of Agriculture 2010 early results just published showed there were 139,829 farms compared to 141,527 farms in June 2000. The utilised agricultural area increased by 2.8% over the ten year period, from 4,443,071 hectares in June 2000 to 4,569,359 hectares in June 2010. The average size of agricultural holding increased from 31.4 hectares to 32.7
- The land area of Ireland is 6.9million hectares, of which about 4.2million hectares is used for agriculture or about 64% of total land area and 745,456 hectares for forestry or about 10.8% of total land.
- Approximately 80% (3.36 million ha) of agricultural area is devoted to grass (silage, hay and pasture), 11% (0.46 million ha) is in rough grazing and the remainder circa 9% (0.38 million ha) is allocated to crop production.
- Beef and milk production currently account for around 58% of agricultural output at producer prices.
Number of farms and utilised agricultural area, Census 2010
|Number of farms and utilised agricultural area in June 2000 and June 2010|
|Number of farms||141,527||139,829||-1.2|
|Utilised agricultural area excluding commonage (hectares)||4,443,071||4,569,359||2.8|
|Average farm size (hectares)||31.4||32.7||4.1|
- There are approximately 139,800 family farms in Ireland with an average size of 32.7 hectares per holding according to the Agricultural census of 2010.
Farm Structure Surveys were conducted in 2003, 2005 and 2007 to track changes in the agricultural sector since the Census of Agriculture 2000. Some data from these surveys will be revised based on the Census of Agriculture 2010 final results.
Main Commodities Output and Exports
Output, Input and Income in Agriculture, 2011
The CSO currently estimates that the operating surplus in agriculture in 2011 shows an increase of €603.4m. or 32.5% on 2010. This follows a 28.7% increase in 2010. The estimate for 2011 is based on the data currently available for the year and it is expected that this data will be revised in June of 2012.
Comparing 2011 with 2010 we see that the estimated increases in value of the component items were:
- Goods output at producer prices: 17.1% or €913m
- Milk output: 18.6% or €286m
- Cattle output: 19.7 % or €294m
- Pigs output: 19.6% or €64m
- Sheep output: 13.9% or €23m
- Cereals output: 52.5% or €102m
- Total intermediate consumption: 11.8% or €501m
- Fertilisers: 9.7% or €44m.
The value of subsidies less taxes on production increased by 11%, from €1,658m in 2010 to €1,841m in 2011.
- The contribution of Primary Agriculture to the Irish economy in 2010, at 2.5% of GDP, is around twice that of the EU average. Agri-food exports account for over 25% of total foreign earnings.
- Cattle and milk output accounted for around 58% of agricultural output at farm gate prices in 2011.
In terms of the destination of Irish food and drink exports in 2011, the United Kingdom at around 43% remained the principal market with sales of just over €3.7 billion. Continental EU markets account for 34% of food and drink exports with a combined value in excess of €3 billion.
- Ireland in 2011 exported in excess of 90% of its net beef output, making it the largest beef exporter in the EU and fourth largest in the world. In terms of total beef production the domestic market consumes less than 10%.Agri-food exports comprising Dairy Products & Ingredients accounted for 30%, Beef & veal 21% prepared consumer foods 18%, Beverages 14%, Seafood 5%, Pig meat 4%, while live animals 2% sheep and sheep meat together with poultry and edible horticulture accounted for 2% each.
Cattle and Beef
- There were 6.5 million cattle in Ireland according to the June livestock survey on the 30th June 2011, this represents a 2% fall on prior year levels.
- Irish beef production is predominately a grass based system, with 548,000 tonnes produced in 2011.
- In 2011, Ireland exported an estimated 510,000 tonnes of beef worth approximately €1.8 billion.
- In 2011, 215,000 cattle were exported live from Ireland worth approximately €205 million.
Sheep and Sheep meat
- For 2011, the latest June livestock survey indicated that the Irish sheep flock increased by almost 4% to 4.8 million head, with the breeding flock increasing by 1% to 2.51 million head.
- During 2011, Ireland exported an estimated 37,000 tonnes of sheep meat which was valued at approximately €180 million.
- France is the main market for Irish sheep meat exports, accounting for approximately 48 per cent of total exports in 2011. The UK is also a substantial export market, taking 29% of shipments.
Pigs and Pig meat
- In the June 2011 CSO Livestock Survey there were 1.56 million pigs in Ireland, this represents an increase of over 2% on prior year levels.
- In 2011, Ireland exported an estimated 168,000 tonnes worth approximately €395 million.
- In 2011, the UK was the main market for Irish pig meat taking over 46% of our total exports. Continental EU markets accounted for 28% of our pig meat exports while the remaining 26% went to international markets.
- In 2011, total milk output (incl. imports) was estimated at 5,400 million litres.
- From this total milk output, 495 million litres was consumed as liquid milk. In addition to this 136,000 tonnes of butter were produced in 2011. While 179,900 tonnes of cheese were produced in 2011.
- In 2011, total dairy exports rose by an estimated 17% to €2.67 billion.
The Net Contribution of the Agri-Food Sector to the Inflow of funds to Ireland
The agri-food sector makes a very significant contribution to the net inflow of funds to the Irish economy. Analysis completed by economist Brendan Riordan highlights that the net foreign earnings of the ‘bio sector’
- contributes approximately 30% of the total net earnings from primary and manufacturing industries
- This is approximately double the sector’s contribution to exports. The main reasons for the sector’s disproportionately large net contribution to earnings from exports are; its low import dependence, accounting for half of all purchased Irish goods and services by the manufacturing industry, and the low levels of profit repatriation among its processing firms.
This contribution is also reflected by the fact that for every €100 of exports, the ‘bio sector’ accounts for significantly higher net foreign earnings than the ‘non-bio sector’. In 2005 this was €48 for the ‘bio sector’ as opposed to €19 for the ‘non-bio sector’. The largest disparity between the ‘bio sector’ and the ‘non-bio sector’ was in the import content of exports. These were €38 per €100 in the ‘bio sector’, but €58 per €100 of exports in the ‘non-bio sector’. Further research is due to be carried out in order to update this study with more recent data.
National Farm Survey (NFS) 2010
In 2010 1,050 farms participated in the Teagasc National Farm Survey (NFS), these farms are weighted to represent a national population of approximately 99,500 farms. Overall 2010 was a good year for farming with average farm income up 46%, albeit from a very poor year in 2009. Average family farm income in 2010 is estimated at €17,771, while this represents an increase of 46% on 2009, it is only an increase of 5% on 2008 and a decline of 10% on 2007.
- The average income figures conceal the mixed fates of the various farming sectors. While family farm income increased substantially on dairy and tillage farms, up 81% and 141% respectively, cattle and sheep farms did not fare as well. Family farm income on cattle rearing farms increased by 8% and income on sheep farms increased by 15%.
- Dairy farms benefited from the substantial recovery in global dairy commodity markets, with farm gross output up 20% on the 2009 level.
- Tillage farms also gained from more buoyant cereal markets. Gross output on tillage farms increased by 40% from 2009 to 2010.
- Gross output on cattle rearing farms increased by 10% from 2009 to 2010, however gross output on cattle other farms increased only slightly by 1%.
- Gross output on sheep farms increased by 11% in 2010. Sheep farmers benefited from more favourable lamb prices and the introduction of the Sheep Grassland Payment. This subsidy, worth approximately €9.20 per ewe, is coupled to production and so is included in farm gross output.
- Across all farm systems input expenditure increased by 5%. Total subsidies per farm remained at the same level as 2009.
- While farming in general continues to be very reliant on subsidies, subsidies accounted for 98% of family farm income on average in 2010, increases in the market value of produce has seen market based gross output per farm increase by 23% from 2009 to 2010.
- In line with developments in the wider macro-economy the number of households where the farmer and/or the spouse has an off-farm income declined in 2010, from 54% of households in 2009 to 51% in 2010.
Overview of the dairy farm system
There were approximately 16,000 specialist dairy farms represented in the NFS in 2010. Income on these farms increased substantially in 2010 on the back of a very poor year in 2009. Gross output on dairy farms increased substantially, by 20% from 2009 to 2010, Figure 8.
This increase in gross output emanated from both the volume and value of production. The average milk price paid to farmers in the survey increased by 29% from 2009 to 2010, and the volume of milk delivered for sale increased by almost 8%. The total value of direct payments fell by 2% from 2009 to 2010 and comprised 16% of total farm gross output on dairy farms in 2010.
Overview of the cattle rearing system
There were approximately 23,500 cattle rearing farms represented in the NFS in 2010, suckler cow production is the dominant system on these farms. On the back of stronger cattle prices, market based gross output increased by 11% from 2009 to 2010,Figure 9.
The total value of direct payments increased slightly from 2009 to 2010 and comprised 50% of total farm gross output on cattle rearing farms in 2010. With input expenditure up 7%, the average FFI on cattle rearing farms increased by 8% from 2009 to 2010.
Overview of the cattle other system
There were approximately 32,000 cattle other farms represented in the NFS in 2010. Cattle, other than suckler cow production, is the dominant system on these farms. Market based gross output on cattle other farms increased by 6% from 2009 to 2010, Figure 10, this was insufficient to offset the 4% decline in the value of direct payments. With input expenditure decreasing by 2%, average FFI was 4% higher on cattle other farms in 2010 compared to 2009.
Overview of the mixed livestock system
There were approximately 5,000 mixed livestock farms represented in the NFS in 2010, the majority of these farms have a dairy enterprise but it is not the dominant system on the farm, hence the title “mixed livestock”. As these are mixed system farms they have benefited from both the increases in milk price and to a lesser extent grain prices. Gross output from the dairy enterprise comprises almost 64% of total farm gross output on these farms and income on these farms increased by 55% from 2009 to 2010. Market based gross output increased by 17% from 2009 to 2010 and the total value of direct payments decreased by 4%.
Overview of the sheep farm system
There were approximately 17,000 mainly sheep farms represented in the NFS in 2010. Income on these farms increased by 15% from 2009 to 2010. This increase in income was almost entirely driven by an increase in gross output. Lamb prices increased by 17% from 2009 to 2010. Sheep farmers also benefited from the Sheep Grassland Payment, although farmers did not receive this payment until early 2011, it is accrued to the 2010 year in this analysis. The payment is worth approximately €9.20 per ewe.
Overview of the tillage system
Approximately 6,500 mainly tillage farms were represented by the NFS. Income on these farms increased by 141% from 2009 to 2010 but it is important to note that this on the back of a very poor year in 2009. Market based gross output increased by 55% in 2010. Yields per hectare of wheat increased by on average 5% while the price per tonne increased by 56%. Input expenditure increased by 9%.