Agriculture in Ireland
The Irish Agri-Food Industry
The Department of Agriculture, Fisheries and Food 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 and provides 7.4% 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 150,000 people. It includes approximately 600 food and drinks firms throughout the country that export to some 140 markets worldwide.
The agri-food sector (including agriculture, food, drinks and tobacco) accounts for around 8% of GDP with primary agriculture accounting for 3% of GDP.
| Contribution of the Agri-Food Sector to GVA in 2009 | €m |
|---|---|
| Gross Domestic Product (GVA) at Factor Cost | 149,583 |
| GVA in Primary Agriculture, Fisheries and Forestry at Factor Cost | 3,555 |
| GVA in Food & Beverages Sector | 5,768 |
| GVA in Wood Processing | 150 |
| Total | 9,473 |
| GVA in Primary Sector as a % of Total GVA | 2.4% |
| GVA in overall Agri-Sector as a % of Total GVA | 6.3% |
| Source: CSO | |
Employment in the Agri-Food Sector
Composition of Employment in the Agri-Food sector, 2010
Source: CSO QNHS Quarter 2, 2010
Agri-Food Exports
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.
Food exports grew last year by 11 per cent and were valued at almost €8 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 2009-2010
| 2009 | 2010 (e) | 2010/2009 | % Share of | |
|---|---|---|---|---|
| €m | €m | % Change | Agri-Food Exports | |
| Dairy Products & Ingredients | 1,960 | 2,285 | +17% | 29% |
| Beef | 1,397 | 1,510 | +8% | 19% |
| Prepared Foods | 1,296 | 1,395 | +8% | 18% |
| Beverages | 1,060 | 1,190 | +12% | 15% |
| Pig meat | 289 | 317 | +10% | 4% |
| Seafood | 315 | 370 | +18% | 5% |
| Edible Horticultural & Cereals | 198 | 200 | +1% | 3% |
| Poultry | 183 | 200 | +9% | 3% |
| Sheep meat | 164 | 170 | +4% | 2% |
| Live Animals | 213 | 245 | +15% | 3% |
| 7,075 | 7,882 | +11% | 100% | |
| Source: Bord Bia | ||||
Land Use
- Irish agriculture is primarily a grass-based industry.
- 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 close on 60% of agricultural output at producer prices.
Farm Structure
The CSO, Farm Structure Survey 2007. conducted with a final sample size of 55,500 farms, yields the following detail in respect of Irish farm structures.
- There are approximately 128,200 family farms in Ireland of which 63% or 80,766 farms are less than 30 hectares in size.
- The average farm size was 32.3 hectares.
- Farm holders in the older groups (55 years or over) represented 51% of the holder population in 2007.
- In common with trends in all EU member states, farm numbers in Ireland declined continuously over recent decades.
Main Commodities and Exports
In terms of the destination of Irish food and drink exports in 2010, the United Kingdom at 44% remained the principal market with sales of just over €3.4 billion, representing a rise of 4% on 2009 levels. Continental EU markets account for 34% of food and drink exports with a combined value estimated in excess of €2.68 billion. up 4% on 2009 levels.
- The contribution of Primary Agriculture to the Irish economy in 2010, at 3% of GDP, is twice that of the EU average. Agri-food exports account for over 25% of total foreign earnings.
- Beef and milk production account for around 60% of agricultural output at producer prices. Tillage and horticulture (cereals 4%, potatoes 2%, fresh vegetables & fruit 4%, forage plants 16%) account for 26% of output while pigs and sheep account for 6% and 3% respectively.
- Ireland exports some 90% of its net beef output, making it the largest beef exporter in the EU and one of the largest in the world.
- Exports of Dairy Products & Ingredients accounted for 29% of agri-food exports while sheep meat exports amounted to 2%.
Beef
Somewhere in the order of 98% of beef exports were destined for continental Europe with the UK accounting for half of Irelands beef exports at 254,000 tonnes with a value of the order of €685 million.
- In 2010, Ireland exported circa 500,000 tonnes (cwe) of beef worth €1,510 million.
- In 2010, 340,000 cattle were exported live from Ireland worth €150 million.
Sheep
- In 2010, Ireland exported 36,500 tonnes of sheep meat worth €170 million. The French market accounted for 50% of Irish sheep meat exports, with shipments there estimated to be 18,500 tonnes with a value of €95 million.
Pigs
- In 2010, Ireland exported 134,000 tonnes (product weight) worth approximately €317 million.
- In 2010, Ireland exported an estimated 63,000 tonnes to the UK with an estimated value of €195 million. The UK market in pig meat accounts for around half of total exports in volume terms and given the relative value of exports, around two thirds of total value. Continental EU markets accounted for 38,000 tonnes of product with an estimated value of €65 million.
Dairy
Exports of Irish dairy products and ingredients were valued in the order of €2.29 billion
- In 2010, total Irish milk output amounted to 5,582 million litres with an estimated value of €1,536 million.
- The total number of producers in milk production at 1 April 2010 was 18,294, a drop of approximately 3.4% on 2009.
Prepared Foods
- Prepared food exports were up 8% in the year 2010 with an estimated value of €1.4 billion. The UK market remains the principal destination with a take up of 43% in the period Jan-August 2010.Continental Europe accounted for 34% of exports in the same period.
Beverages
- Exports in this sector experienced a 12% growth over 2009 to a value of €1.19 billion.
Edible Horticulture & Cereals
- The value of this sector showed a modest 1% growth in exports to an estimated value of €200 million.
Agricultural Economics
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.
In 2010, 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 8.5% of total exports.
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 will be carried out in 2011 to update this study with more recent data.
National Farm Survey 2009
The most recent survey data relating to average farm incomes is the National Farm Survey 2009. As in previous years family farm income varies significantly depending on the size of farm and system of farming, etc. In 2009, average family farm income was estimated to have fallen by 30% to €11,968. The decline was entirely attributable to a drop of 14% in the value of gross farm output, as total costs actually fell by 7%. Especially hard hit were specialist dairy farms, where incomes dropped by 48% year-on-year to €23,684. Sheep farms were the only ones to record an increase in incomes, albeit of only 1%.
A comparison of farming characteristics and financial return for full-time and part-time farms is shown in Table 2.2. Average farm income for the 30.4% of farms classified as full-time was €24,214 in 2009, a decrease of 35%. Full-time farms are the larger more viable farms, of which, 60% are involved in dairying, 32% in other livestock system and 8% in tillage. On 14% of full-time farms, the farmer had an off-farm job, whilst on 43% of full-time farms the spouse had an off-farm job. For the roughly 70% of farms classified as part-time the average family farm income was €6,611 (down from €7,580) and 89% were involved in dry stock production. These farms were particularly reliant on direct payments to cover production costs with average payments of €12,077 accounting for 183% of family farm income. On 54% of part-time farms either the holder or spouse had off farm employment – down from 56% in 2008 and 60% in 2007. Nearly all (96%) part-time farms had off-farm income from one of employment, pensions or social assistance.
Off-farm Employment Income
The National Farm Survey 2009 estimates that 39% of farm holders had an off-farm occupation. Most of the farmers with off-farm jobs were classified as part-time (in terms of labour input on farm) and had combined farm and non-farm earnings of €31,100. Those with full-time farms and off-farm employment had an average income of €42,600. Overall average off-farm earnings, for those who had off-farm jobs was estimated to be €24,700 (Figure 2.3), average family farm income for these farms was €7,800 giving a combined income of €32,500.
Of the 65% of farm holders who stated that they had no off-farm income, 40% were estimated to have full-time farms. These full-time farms had an average family farm income of €25,000. The remaining 60% were classified as part-time farms and had no off-farm earnings. These had an average family farm income of €7,000.
Direct payments per farm in 2009 averaged €17,109, accounting for 36% of Gross Output and 143% of family farm income. And 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.
