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The Economic Returns to Formal Agricultural Education

There is a positive and significant economic return to formal agricultural education for Irish farmers and Irish society according to Professor Gerry Boyle, Director of Teagasc. He was speaking today, November 20th, at the launch of a new Teagasc research report ‘The Economic Returns to Formal Agricultural Education’ at the Teagasc College of Amenity Horticulture, National Botanic Gardens, Dublin.

In a rapidly changing technological and economic environment, agricultural education is most important. Professor Boyle said that the study confirms a positive return to agricultural education both in terms of the internal rate of return from a human capital perspective[i] and also the benefits from agricultural education to farm level yields, intensity, and income. The study was based on Teagasc National Farm Survey data on 1,100 farms for the period 2000 to 2011.

The analysis shows that holding an agricultural education qualification increases family farm income. Professor Cathal O’Donoghue, Head of Teagasc’s Rural Economy and Development Programme and co-author of the report, said that the actual pathways through which formal agricultural education increased income was by improving farm-level yields and intensity in terms of livestock units per hectare. Typically, average gross margins per hectare were between 1.3 and 1.7 times higher for those farmers who have formal agricultural education compared to those who do not.

Presenting information on the internal rate of return, Professor O’Donoghue confirmed that that private return to agricultural education was 8.8%, which is higher than the 5.8% return to higher tertiary education. In addition, the social return for agricultural education at 13.4% was higher than that for higher tertiary education at 5.7%. Incorporating the broader supply chain impact, Professor O’Donoghue outlined how the social returns from agricultural education reach over 24%.

Dr. Kevin Heanue of Teagasc’s Rural Economy and Development Programme, and co-author of the report, said that there is a clear understanding of the process by which formal agricultural education benefits farmers. Education improves a farmer’s technical efficiency leading to better use of resources. It also leads to better decision making. Both of these increase farm level yields and intensity, and income.

Dr. Heanue said that from 2000-2011, the percentage of farmers with a formal agricultural education increased from 24% to 44%, with a greater increase in the proportion of farmers achieving an agricultural certificate, going to agriculture college or attending short courses compared to those achieving university level agricultural training. In the dairy, tillage and mixed livestock systems, the proportion of farmers with a formal agricultural qualification exceeded the average for all farmers, whereas for the cattle rearing and cattle other systems, it was below average.

Welcoming the report, Tony Pettit, Teagasc Head of Education outlined Teagasc’s role as the primary accredited education provider for the overall land-based sector. In excess of 3,700 learners participate annually in Teagasc further education or Teagasc-linked higher education, said Tony Pettit. Typically, over two-thirds of these learners attend the 4 Teagasc colleges and the 3 private colleges. The remainder participate in education courses at one of the 12 Teagasc Regional Education Centres. In addition, the organisation provides a comprehensive suite of accredited and non-accredited short courses and lifelong learning to adult farmers and industry personnel with participation levels in the region of 3,000 to 5,000 annually. Tony Pettit revealed that in recent years Teagasc has experienced a more than doubling of full-time student equivalents in its colleges.