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Economists debate CAP reform and sustainability of Agri-Food sector

The annual conference of the Agricultural Economics Society of Ireland (AESI) is taking place in the Teagasc Food Research Centre, Dublin today, Thursday, 24 November. Speaking at the conference, Dr. Emma Dillon of Teagasc said; “Agricultural economists from Ireland, along with a number of international contributors have come together to discuss the main issues facing Irish agriculture. Contributions in the areas of production economics, food economics and marketing, natural resource economics and rural development will be made”.

Dr. David Stead, President of the Agricultural Economics Society of Ireland, said; “The conference will stimulate debate on two key issues in particular: CAP reform and sustainability issues along the food supply chain and the implications of these issues for Irish agriculture.”

Prof. Alan Matthews from Trinity College Dublin will discuss issues raised for Irish agriculture as a result of the legislative proposals to amend existing CAP regulations in the post 2013 period. Wilfred Legg, formerly of the OECD, will address the topic of sustainability and the need for what he refers to as ‘green growth’. He said that ‘green growth’ is not only desirable and achievable, but it is essential if the food and nutrition requirements of future generations are to be met. This implies that productivity growth must be increased, in a sustainable manner and well functioning markets must provide clear price signals reflecting the scarcity value of natural resources.

Dr. Fiona Thorne, Teagasc, speaking about the economic sustainability of the current model of Irish dairy farming said that the competitive position of the Irish dairy sector at farm level remains favourable in cash cost terms. However, when additional costs are factored in to cover the operator’s owned land, labour and capital, the Irish dairy sector’s performance is less impressive. However, the end of the quota system may provide the opportunity to increase milk production on smaller Irish farms so that economies of scale can be exploited, which will improve the longer term competitive potential of the Irish dairy sector.

Highlighting the impact of the economic recession on farm households in Ireland, Head of the Rural Economy and Development programme in Teagasc, Dr. Cathal O’ Donoghue said; “Despite the relatively buoyant commodity prices prevalent in 2011, farm households have faced a number of income shocks within the economic crisis in Ireland since 2008. In particular, off-farm employment rates are now returning to 1999 levels, reductions in subsidies such as REPS and changes in taxation are all impacting on welfare at household level.”

A number of initial findings with regard to consumer acceptance of a range of novel food technologies were also presented by Dr Emma Dillon of Teagasc. She said; “Given the scale of investment by public agencies and others in technological R&D this research should prove useful in influencing the trajectory for other novel food technologies”.