May 3, 2011

We must go back to the land

Posted in Ireland · 110 comments ·
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With the sun glinting off the Shannon, boats meandering across Lough Allen and green rolling hills in the distance towards Fermanagh, this county on this gorgeous morning easily lives up to its tourist billing of ‘‘lovely Leitrim’’.

In the centre of Drumshanbo, under a plaque to a local fiddler named Ciaran Emmet, a knot of old ladies gossip and marvel at the ‘‘savage’’ weather before one of them says, ‘‘I’m off, girls, for the wedding,” and they disperse to watch the swanky royal nuptials taking place in England.

A few anglers march by, heading for one of the many lakes, while lads outside the Pyramid Bookmakers, dockets in hand, drag deeply on their Rothmans, certain that this will be their lucky day. Down past Conways bar is Laird House, once home to the ‘‘Bo Peep’’ jam factory, an Irish brand which, along with Cadet Cola and Soda Stream, reminds me of a time when little towns like this made things.

Towns like this can do so again.

In fact, in a climate like this, you could grow anything around here.

Up on the hills surrounding Drumshanbo, the huge windmills attest to another environmental gift – wind. Lots and lots of wind. There are natural resources aplenty here and what is needed is the wonderful chemistry of human creativity to make something happen locally.

Without that creativity and the lubricant of credit, the faded photos in Drumshanbo Library from1958 of local people being waved off at the train station on their way to England will simply be re-mastered in digital form as young locals flee again.

Luckily for this part of Leitrim, four local entrepreneurs have come together privately to create an initiative called LABS (Lough Allen Basin) Energy Hub.

But what sort of businesses are they targeting and why? What has this part of the world got going for it, and what is going on in the rest of the world that might make remote parts of Ireland attractive? Let’s consider the following.

The greatest economic dilemma for the future will not be about banks, balance sheets and the movement of paper money all around the world. The big issue is resources, who owns them, who can renew them and their price.

We are potentially moving into a neo Malthusian world, where the irresistible force of six billion new consumers (mainly from China, India and Brazil) crashes into the immovable object of the world’s finite resources, with potentially catastrophic consequences.

We are seeing already this as the price of all commodities goes through the roof.

The price of oil has gone up fourteen-fold since 2000.The price of coal is up five times over a similar period, as is uranium. It is not so much that we are at ‘‘peak oil’’ ,we are at ‘‘peak everything’’, and the prices of all energies will continue to skyrocket. Sure there’s an element of speculation driving prices, but what is really behind this is that the only thing that isn’t scarce these days is us – humans. The world’s population is rising at 80 million per year.

That is the population of Germany – Europe’s most populous country. So every year there are 80 million more mouths to feed.

Not just that, but the type of food they want has changed. The Chinese and Indian middle classes – making up an estimated population of 200 million – have dramatically changed their diets in the past few years, demanding meat and dairy like never before.

This is the biggest change in global agriculture in a generation.

On its own, the change in global demand would increase the price of food worldwide, but what is also propelling the price of food and amplifying this demand shock is the fact that intensive production of food demands lots of petroleum-based fertiliser and huge amounts of diesel. Put simply, the world is eating fossil fuels!

Look at the chart (above right).This is the trajectory of commodity prices. While the peaks and troughs are the result of speculation, the upward movement is caused by these real factors.

So what has this to do with lovely Leitrim on a glorious spring day?

The first implication for Leitrim (or any county really) is that places where it is easy to farm will do exceedingly well, given the chance. In the future, agriculture will move from being a low-yielding pursuit where the return on equity was modest, to a high-yielding, profitable game where the return on equity will be considerably higher.

The policy implication of this is that it puts into question the EU’s ‘‘set aside’’ policies, where huge tracts of land in Ireland lie fallow and the farmers are paid not to farm. Can you imagine anything more ridiculous in a world facing food shortages than farmers in the part of the world that is climatically best placed to farm, being paid to do nothing?

In Ireland, unlike other parts of the world, grass for cattle farming is free. In the likes of Brazil, they have to pay for fertilisers to grow the grass, while over here it just grows.

Wouldn’t it be smarter to begin to increase agricultural production by deploying the resources we have in order to farm more intensively? If we increased investment rather than subsidising idleness, there could be an agricultural revolution in Ireland, with enormous positive implications for rural communities.

The other implication of the world’s Malthusian conundrum is that the shift to alternative energy will be accelerated.

As the price of oil rises, the opportunity cost of other energies, even if the initial outlay is expensive, will fall.

Even without greenhouse emission concerns and the imperative of carbon neutrality, the move to alternative fuels is unstoppable.

So what about the cost of this alternative energy? According to the Irish Academy of Engineering, the cheapest alternative and environmentally-friendly source of energy in Ireland is the biomass used in existing peat stations.

The next cheapest source is wind-farms on land, while – according to the Academy wave energy technology is still very expensive. Approximately one-third of Ireland’s wind energy capacity – current and future – is within 40kms of the Drumshanbo LABs site, so you can see why the Malthusian conundrum has clear implications for this part of the world.

Now let’s also consider biomass. If the land lies fallow, why not give it over to the plantation of willow, to fuel Bord na Mona’s power stations? Willow has a three-year renewable cycle, will grow in this area and Bord na Mona will guarantee a return to the farmer in advance, which they can then use as bank collateral to invest further. Every three years this cycle can be repeated.

It’s clear that the world is changing and the major shift in energy and food prices is positive for us, simply by virtue of our climate. Sometimes fate deals you a decent hand, it is up to us now to play it.


  1. One wonders whether the fact it was said by David McWilliams now disqualifies it as a possiblity?

    Of course this country is a diamond – Just look at it from the air
    - That’s pure “green gold” but I have to say, not as green as it used to be? – Has anyone else noticed that?

    Anyway I digress. The facts to me that seem plainly criminal are;

    1. We import our once commonly grown vegetables
    2. We tolerate non-productive land and;
    3. There does not yet exist a national plan to make us self sufficient in, if not an exporter of, natural energy?

    • Malcolm McClure

      David: Leitrim, is a good example county to support your case for agricultural productivity. Driving up through the drumlins from Ballinamore to Swanlinbar, you pass poorly drained fields choked with rushes on every side. Reaching Fermanagh, the same drumlins are drained, fertilised and support rich pasture. Leitrim’s land productivity potential is good but generations of emigration, neglect and under-investment have left much of it an agricultural wasteland.

      The vast llanos of Venezuela, Colombia, Brazil, Uruguay and Argentina support some of the finest beef cattle anywhere. If the EC beef market were open to competition from South America, Ireland wouldn’t get a look-in.
      In Ireland as you say, the grass ‘just grows’. Maybe our fields need better drainage, reseeding and fertilizer, but we have other advantages.
      Although the lush grass in the llanos doesn’t need fertiliser, there are other hazards there. Vampire bats, Anaconda snakes, Orinoco crocodiles, Jaguars y los Indios all take their toll. The abattoirs there would never pass EC regulations and transport to market is hampered by long treks over primitive trails. But los llaneros are venerated in folklore and music, even more than the cowboys of the wild west.

      Regarding windpower, Leitrim is a better site for investment than Donegal as the high voltage national grid goes through Carrick on Shannon but Donegal is out on a low-voltage limb. But wind energy can be difficult to balance. Six Scottish windfarms were paid up to £300,000 to stop producing energy,
      http://www.bbc.co.uk/news/uk-scotland-13253876
      I wonder what Furrylugs thinks of this?

      • MT25

        Yes Wind is hard to balance, the Danes have an interesting dynamic market system that prioritises wind and incentivises shutdowns from other producers when “the wind is up”. Biomass works well in CHP plants that use heat storage and heat pumps when the grid is flooded with cheap wind energy. Even possible to buy electricity at negative prices during these periods.

        • Colin

          Bet you the Danish biomass employees don’t take their employer to court looking for payment of bonuses and overtime for work not done. That is the difference between the two countries.

          • Deco

            As far as I understand it the Danish Renewables includes a lot of locally based co-operatives.

            This means a completely different work ethic. And none of this smart-alecry that tends to provide a gold mine for the legal profession as tends to happen here, with just about anything that has any potential.

      • coldblow

        Reminds me of Crotty’s neighbour (I think) who sat back and let the state spend thousands (at a time when this was big money) clear his land for him. Why bother working the land or even managing it if it’s more cost-effective not to? His remedy was a land tax, in effect use it or lose it. Is the difference from Fermanagh a cultural one where we lack the work ethic, or are there different economic sticks and carrots at play in N. Ireland? My instinct is that while there might be the former it all boils down in the end to the latter.

    • A tribute to David http://www.sovereignindependent.com/?p=19191

      Not worth the effort to analysis this article. Same old flaws as pointed out before. Just remember this is an opinion piece not FACT

      “and the prices of all energies will continue to skyrocket”

      “but what is also propelling the price of food and amplifying this demand shock is the fact that intensive production of food demands lots of petroleum-based fertiliser and huge amounts of diesel”

      Noting on the great credit/monetary expansion or on the productivity gains achieved and we will continue to achieve.

  2. Deco

    Well, our first step at bringing an improvement in the economic situation in this country, would be if we all got down off peak BS. Of course the people who followed David’s analysis down the years, were lucky that they were never climbed Peak BS to begin with. But there still is a massive intellectual battle to be resolved.

    Wind energy is a massive potential game changer in this country. But, I reckon that the centralized bureacratic enterprise that is the ESB is against wind energy, because it loses it’s monopolistic power in the market. There is a massive issue concerning energy storage. And this needs to be resolved. In fact the energy storage issue is the game changer in wind energy, and wind energy is the game changer for Ireland. I think that the co-operative movement might give us the option of circumventing the ESB, and the credit problem. For example, suppose a co-operative existed in West Galway, to use wind power based along the coast, and thereby produce energy to the locality. It could provide a dividend to local small scale investors. It would reduce energy imports, get the support of the local people, and result in local money being spent in the local economy. It would be better than paying for Moneypoint. I am suggesting Galway because the money would be easier to raise in Galway than in Leitrim for obvious resons. Unfortunately, in recent years, we had the media and the real estate industry instead urging people to outbid each other for second homes in Sunny Beach. A massive misallocation of capital occurred. Besides, in the Binge era, showing off was more important than getting the simple things right. In fact, focussing on the simple things was given derisory commentary as being “common”. The same adjective there as in “common sense”.

    Concerning the land resource, well it comes down to the incentives in the agricultural system. I am told that the incentives at the moment are to comply with bureacrats, inspectors and government officialdom – who in many cases are political activists, or reliable party voters. Basically, agriculture is policed into non-existence. No wonder that there are farmers incentivised to do nothing – it probably pays better, and gives a better long term return. In the agriculture and the fisheries sector, bureacracy exists for it’s own sake. And that is before we example the market rigging taken on the part of gombeens like the Beef Baron.

    Gombeenism is the national business plan, and the national management philosophy rolled into one. And it is the source of much of our persistent underperformance. Gombeenism offers ways of dealing with this underperformance – getting drunk on either booze, other substances, pride or consumerist excess. The Binge era was the high era of gombeenism. In fact pride is the lynchpin that holds it in place. Remove the pride attachment, and common sense comes back.

    Therefore, let us continually undermine it by means of intellectual argument. The intellectual change, will predict the behavioural change, and eventually the financial, and structural change.

  3. Deco

    Canadian Election has just completed.
    For an interesting insight into how to better run a democracy, do some research to get details of the academic achievements of all the political leaders of the main parties in Canada.

    Harper, the next PM is an economist. The others have PhDs, and are university lecturers. And in serious universities. Basically, the leaders of the various parties are well trained, and well qualified for their responsibilities. And they have training in areas that is of relevance to the citizens. As far as I know none of them are small town solicitors who never practiced law, teachers who never taught, social workers lecturing us about Einstein etc..

    People of Ireland, you might wish to take note, on the issue of better leadership, and preparation for responsibility. This is not making the headlines on RTE, as far as I know. RTE are going easy on the amateurs and the clowns in the Kildare Street Circus.

    http://www.cbc.ca/news/politics/canadavotes2011/

    • Gege Le Beau

      An education has never stopped people from doing stupid things, while people who bucked the ‘educational system’ which in the West is in large part about preparing people to comform to economic processes, achieved great things, Mark Twain is but one, there are many more.

      It is also a question of how knowledge is applied & utilised. As Twain memorably stated: Education: that which reveals to the wise, and conceals from the stupid, the vast limits of their knowledge.

      More often than not it is about the content of a person’s character and not the certificates on the wall or as Marx wrote: it is not what a man has but who a man is that is important.

      Canada may have avoided a financial meltdown because of prudent banking practices but it is not an error free democracy by any stretch of the imagination just ask the indigenous population or the troops it has running around Afghanistan in a mindless war.

      • Deco

        Gege – I am just making a point that their party leaders are all highly trained, well educated people.

        We are dealing with a bunch of dimwits in comparison.

        And RTE gives this the rubber stamp of approval.

      • michaelcoughlan

        Hi Gege,

        Here we go again. I presume you would prefer that the Taliban and alkieda should be free to conduct their activities rather than be challenged? By the way a Canadian sniper clocked dup the longest range kill in history in Afghanistan at over a mile. Fair play to him. Thank GOD someone has the guts to put manners on those guys.

        • Gege Le Beau

          Highly progressive stuff Michael. One down, a billion plus more to go.

          • Colin

            Gege,

            If they want WW3, they’ll get it, and get wiped out.

          • michaelcoughlan

            As Sarah Palin would say,

            “You Betcha!”

            By the way Gege if the Canadians need a machine gunner to mow down a few thousand of the billion Osama Bin Laden types then they can count on me or would it be fair to say that 1 billion peaceful Muslims have nothing whatsoever got to do with Bin Laden and his ilk?

          • Gege Le Beau

            Fighting talk Michael, you might even get a place in the first wave with such bravado.

          • michaelcoughlan

            “Get some”

  4. MT25

    Maybe it is time for every community on this Island to set up their own Energy Co-op or ltd company, whatever…If we don’t take ownership of our wind, wave and other natural resources they will be taken by corporations and sold back to us as energy at a premium. That is, if we can afford their prices, otherwise it will be exported to UK/Europe. Our wind is no less valuable than the Corrib gas reserve. We are very likely to give it all away for free. Invest now in local energy projects!

    • Bamboo

      Well said.
      Not only energy projects but also land, grass, soil and earth. They will promise us energy but you need the land for the infrastructure.

  5. Praetorian

    As for the Malthusian thinking on population, I think that has been largely debunked, it is more a question about inequitable distribution of resources and the ludicrous concentration of wealth in the hands of a tiny minority which is detrimental to the great and struggling majority.

    Malthus was a market fundamentalist who believed in the power of the market to regulate human life, we in Ireland have seen firsthand the disastrous consequences of such ideology both historically (the Great Irish (and Indian) famine(s)) and in more contemporary times, so called ‘laissez faire’ or ‘light touch’ (no touch) regulation. Absent from the argument are the huge subsidies given to corporations while at the same time social, health and education programmes which benefit the poor the most are cut across the board (including social welfare payments and the quite scandalously, the minimum wage) in the ludicrous thought that someone such measure will stimulate a dying economy and ‘send out the right signals to the market that Ireland is open for business’.

    Moreover, it is somewhat ironic to see a call for a return to a land given the moves by ‘capitalists’ over the centuries to drive people off the land (for profitable ends), and from an existence which was more measured in terms of consumption and environmentally sustainable. Those advocates of private property and large landholdings forced tenant farmers and their off-spring (remember the Land League) into large conurbations which more often resembled concentration camps or working ghettos characterised by high infant mortality rates, disease and destitution.

    Indeed, Al Jazeera on Sunday ran an excellent report from Hong Kong where Trade Unions protested the staggering inequalities in that great symbol of capitalist power, with its captive working population living in dire and uncertain conditions and with income inequalities that are replicated in every Western capital.

    As one commentator has written: “Look at what was called liberty in England, the first modern democratic revolution, in the 17th and 18th century. Liberty meant liberty for property, which meant taking away from people their traditional rights. Like their rights to the commons. And this was no small thing. The rights to the commons meant forests, and pasture lands, grazing lands, and so on. That’s what kept people alive, and it was considered communal property. With proprietary rights established, with liberty given to the owners, that land was taken away from everyone else. And thereafter you had formal liberty, but popular deprivation, which proletarianized the British working class.”

  6. ‘a knot of old ladies ‘ – could we say the same for Irish Bankers as in ‘ a knot of Irish Bankers’ ?

  7. adamabyss

    subscribe.

  8. Bamboo

    I was in Amsterdam recently and as we are descending into Amsterdam, all I could see from the air between the coast and Amsterdam were buildings, green houses, concrete slabs, roads, canals and some greenery among all that. In fact the whole western part of Holland is like that.
    On descending back into Dublin, all you can see is the sea of course but once you go over land you see lots of green, (golf courses probably) and a few cows and sheep in big fields of green and hardly any trees. The differences are enormous.
    You’d wonder again and again how on earth land ever became so ludicrously expensive here in Ireland. There are lots of it and there are so few people living in Ireland. It is obvious what we do with all that land.

    We waste it by waiting for things to happen and hopefully get rich one day. Now we’re waiting again for things to get better again. These better times are supposed to come soon again and we all live happy ever after again so we can start spending again. Now we are even thinking of selling our forestry. One thing is clear as our sunny daylights – the Chinese will need to have (buy) this land to grow food for their own population. They will know what to do with it.

    We will be left with the scraps of land and food. As the Japanese are emptying the seas, we will be emptied by other economies and the Irish people will have no say in the matter.

    • coldblow

      Yeah, we visited Holland a few years ago and the west was as you describe. I have often thought about it since. We spent a couple of days each in Edam and Harlingen and then a final two in Leiden. In Leiden it wasn’t worth going for a spin outside the city as it seemed difficult to find any countryside suitable for that away from roads and development. So we left the car in the carpark.

      As for the ludicrous land values in Ireland, well this was at the heart of Crotty’s analysis. Labour is expensive here (favouring unemployment) but you can hold land (as much of it as you can aquire or inherit) for free.

    • Deco

      In recent years, with Ireland land was not about agricultural production, it was about speculation. It was a tool for the speculators, to pay off politicos with brown envelopes, and build ghost estates.

      This is what happens in a Casino economy, with artificially cheap interest rates from the ECB, massive institutional corrpution in the state, a media that is paid up by “our advertising sponsors”, and a people that includes a considerable number who will believe in just about anything. And these people consider themselves educated – so they will not be detracted from believeing in the most absurd stuff.

    • Eireannach

      Otto Von Bismarck said:

      “If the Dutch lived in Ireland, Ireland would be the bread basket of Europe. If the Irish lived in Holland they would drown.”

      • He also said:

        ….all treaties between great Nations cease to be binding when they come in conflict with the struggle for existence.

        Fuck the IMF Mafia and EU demands would be the translation today!

  9. A good read that David, lots of great ideas there. There is a link between agriculture and energy that is worth mentioning explicitly: they are forms of land usage. There is a choice to be made about whether its better in certain circumstances to use land to produce energy directly (on-shore wind farms), to use it to create biomass to feed cars or power stations, or to use it to feed humans. We not only have a climate that allows all of these possibilities to be realistic options, but we have a low population density allowing us considerable flexibility in choosing land use options. Its probably also obvious but necessary to state that no one solution is the magic bullet, but careful strategic consideration should be given to how all of these elements combine in our energy mix.

    Now for the conspiracy theorists: I’ll also say that nuclear power, GMO will be part of the discussion. Certainly the latter will become increasingly important since as you have pointed out, modern agriculture is essentially the process of converting crude oil in to food. If it turns out that we collectively cannot live with either, then thats a choice we have to deal with.

    There is also an important element in Malthus’s suite of ideas that you don’t mention but is essential and I have alluded to above and that is the idea of an optimum population level. Its not difficult to see that populations cannot grow infinitely without adverse consequences. There are existing examples, such as third-world regions with high levels of population growth and high levels of poverty, and industrialised regions and high relative wealth with high levels of population but low population growth. There are other environmental, cultural and political factors at work but the basic requirement to feed a population seems like a fundamental consideration.

    I see only opportunity here but we will have to tangle with some culturally unpopular and politically sensitive nettles to realise this. We can kick the can down the road a bit more but at some point choices will have to be made. There are no ‘right’ decisions here but live in hope that we can try to make good ones, which in my view would be based on a rational understanding of the consequences.

    ps for the best quantitative discourse you will find on land, energy and food, have a look at David MacKay’s “Sustainable Energy – Without the Hot Air”. Its available to read for free here: http://www.withouthotair.com/

    • adamabyss

      Good post liam but what the hell is GMO? I have a real problem deciphering acronyms. Is it Genetically Modified something? Thanks, Adam.

    • Bamboo

      Great link, than you!!

    • adamabyss

      Excellent link by the way, just reading the bit on Nuclear Energy.

    • Deco

      One of the greatest peices of deceit in our age concerns the various sources of base load electricity.

      If you want to supply a city or a region of 1 million households, and their enterprises and infratructure, you need base load electricity.

      In most countries, these days this means Coal.

      Now here is a fact that will shock people, and indicate the utter level to which the media is beholden to the coal industry.

      Coal emits more radioactivity than nuclear power, per KW of electricity produced. Much, much more. Except it is spread all over the place.

      Nobody has measured yet the pollution level of radioactive material from peat burning power stations. The ESB and BNM haven’t as far as I am aware.

        • Deco

          Thanks. I appreciate that link greatly.

          The graphic on the right indicates this perfectly.
          Nuclear is safer than all other forms of “Base Load” electricity generation.

          The current technologies available in Nuclear Power are safer, than that which was available when Fukushima was built. The control systems are more accurate. The contingency scenarios can be better mapped. The building technologies are better. The manufacturing technologies for designing and manufacturing the engineering and material components are infinitely better.

          There is a text called “Nuclear Energy : Power to save the world” which shows the real story about Nuclear Power.

          The only thing stopping us, in this country is the flawed management culture.

        • Colin

          Yes, good article, I’ve always been in favour of Nuclear Power. We know coal and oil burning power stations are affecting the health of the country. There is a growing amount of people living in Ireland with Hypothyroidism and as far as I know there hasn’t been any study into this. A pharmacist on locum in the Limerick City region estimates 2,000 people are suffering from hypothyroidism, so that’s 2% of the local population, with more perhaps still undiagnosed. Of course, if there was a Nuclear Power Plant near Limerick, then it would be blamed for this.

  10. I think DmcW is not seeing the full picture here and the above therefore suffers from some inward contradictions.

    He mentions large tracts of land with farmers paid to let the land lie fallow. This is true. The world could produce vast volumes of food in excess of its current production levels.

    Ellen Brown nails the real problem here:

    http://bigozine2.com/feature/?p=539

    “Some economists said the hikes were caused by increased demand by Chinese and Indian middle class population booms and the growing use of corn for ethanol. But according to Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi, demand from those countries actually fell by 3 per cent over the period; and the International Grain Council stated that global production of wheat had increased during the price spike.”

    Similar speculation in the oil futures market along with the drop in value of the dollar, have driven up the price of oil.

    All of the above due to the chaos of Greenspan deregulation and the unfortunate creation of new commodities based financial instruments by banks such as Goldman Sachs that are driving up the price of food and other commodities.

    But I agree, Ireland has huge resources that are under utilised in the agri food area, that should be harnessed to our benefit and the benefit of others.

  11. Colin

    David,

    That’s all well and good, but when you actually get down to it, you’ll find there’ll be lots of problems, just like these selfish unreasonable unionised employees of Bord na Mona who are looking for payment of bonuses and overtime for work not done.

    http://www.rte.ie/news/2010/0819/bordnamona.html

    So, all these great ideas people have, well, they’re great, but worth sfa until we sort out these cossetted state sector shysters who demand more money for work not done.

    • Personally, I don’t disagree with anything you have said. So you have identified a major part of the challenge. Not a reason not to try!

      • Colin

        We’d have to unwind 20 years of Bertie Ahern style social partnership. It can be done, but the vested interests need to be taken on head on, and there’ll be a lot of blood on the floor, it’ll get messy, but it might be worth it in the end if these unionised state sector job for life employees get a dose of reality struck home to them.

        • Deco

          Correct.

          Social Partnership is a stitch up that is completely subverting democracy.

          Who voted for IBEC, ICTU, the CIF, etc… to decide government policy in any case ?

          In fact the whole thing can be blamed for reducing voter turnout and making people apathetic towards voting.

  12. Hi David,

    I agree with the points you have raised in this article. Agriculture and alternative energy are two great examples of sectors that Ireland should now focus on to lead the recovery. I would suggest that water is a resource that is also vital. In many areas of the world water supply shortages are a significant threat. Thanks to nature, we get enough of it in Ireland but our efficiency in utilising this valuable resource is shameful. We should focus on providing the water infrastructure needed to ensure that we can supply good quality water reliably and cost effectively and this will play a key role in enhancing the productivity of industry here, which in turn, will attract significantly more investment long-term, especially in the context of dindling supplies elsewhere.

    Also, one must not forget that Ireland’s sea resources. Our sea resources are approximately 9 times the size of our land resources. There is vast potential for industries such as aquaculture and ocean energy once it becomes more economical.

    Whilst Ireland may be in a big black hole economically, we have all the ingredients we need to succeed and get out of this mess. The question is will we play our hand correctly, or will we let the opinions of others dictate how we play our hand? The choice is ours and we have the responsibility to our citizens, our emigrants and future generations to play our hand intelligently.

  13. Afternoon.

    Thanks for the comments. Just getting through them. I realize I am no expert in the land, farming energy field, but when there appear to be megacycles ahead for food and energy, it would seem stupid not to grab this opportunity.

    Best

    David

    • michaelcoughlan

      Hi,

      If you examined farming closely you may gain a better insight as to some of the blind spots in you arguments regarding housing in the boom. Farming in Ireland on average has a return on capital of 1% or less. I sh*t you not.

      The current market value of good land is 10k per acre and rising down from 20k during the boom. The commercial value of land id about 1k per acre. There is no way into farming for someone who wants to increase production unless they already own land and already have a payment from Europe. Only the existing farmers can increase production. When you look at a business plan from Teagasc they assume you own the land, machinery, and working capital allready and don’t have to pay back borrowings. You still have to take the risk farming.

      The most intelligent farmers are renting their land to other farmers and have small hobby holdings to keep up their interest and skills. And where have we heard the rent seeking non productive false economy argument before? Why you of course.

      • Deco

        In the binge era, a lot of farmers stopped farming, and went applying their skills driving machinery in the construction sector. Farmers make very good JCB drivers, excavation machine workers, site foremen, etc.. And very competetent machinery mechanics, and repair men. At a building site, a machinery operative who could repair his own machinery on the spot was like gold dust in the construction boom. It meant less downtime, and more output for the rest of the construction team.

        It became possible for a farmer to earn real money quickly on a building site, whereas as food production was a lottery, with many years being as unprofitable as profitable – and the profit in the system usually being made by the Beef Barons. Real money took over from phantom profits.

        Market rigging drove down production in the agricultural sector. To make matters worse, the low returns resulted in years of decreasing investment which resulted in continually decreasing production.

  14. Great writing David. Have you ever thought about writing novels and stories? The first part had me hooked and I thought I was in for a journey through rural Ireland of days gone by.

    The land is important and it is part of our psyche and everyone in Ireland should have access to a place to grow their own food. Doing so is healthy because the mind and the body benefits from the physical effort, fresh air and nutritious food.

    I am surprised you never mentioned GM crops as this the next thing in the pipeline.

    If Ireland was to market its meat and dairy produce under a GM Free guarantee there would be plenty of demand worldwide. If we let Monsanto in then we will lose yet another part ourselves.

    When people think of Ireland they think of green fields with healthy grass fed cattle and we should try to keep it that way.

    But of course such an argument is far too simplistic for some people. They can’t see the forest for the trees.

  15. Mary Jenkins

    A small Spanish island of 10,000 people is set to become first inhabited landmass in the world to become completely energy self-sufficient the same could happen here if there was the will to do so, remember the Spirit of Ireland project? http://www.spiritofireland.org

    Spanish Island’s Quest to Be the Greenest Place on Earth http://t.co/q3A6veF via @TIME -

    • Deco

      Good on them !!

    • Beware, Spirit of Ireland is just another Ponzi rip off scheme where the very same law Firm, I have another name for them, who represented Anglo Irish Senior bond holders are on Board.

      Maples and Calder.

      I confronted Spirit to their embarrassment in public on this direct relationship. It is on record.

      • Can you explain what your on about? it might be interisting if I understood it

      • Malcolm McClure

        Georg: I take your points about the unsavoury aspects of the Spirit/IEC initiative, but I don’t think casting aspersions on the participants addresses the key issue.
        IMHO that looks at whether we want pumped storage in Donegal or not.

        On the positive side: Construction of the required dams will give much needed employment for a couple of years and the availability of abundant locally produced energy could attract industry.
        On the negative side: The dams will flood extensive valleys in areas of outstanding natural beauty.

        I think that a positive economic case could be argued in support of the initiative, but I think that is outweighed by the environmental destruction aspects.
        Donegal has already sacrificed outstanding natural habitats to hydro-electrial schemes at Ballyshannon and Dunlewy, with little residual benefit to the community.
        If we support a couple of pumped stooge schemes, they will inevitably be followed by the construction of wind farms on every hill in the county and gigantic HV transmission towers all the way from Donegal to Carrick on Shannon.

        Those are the considerations you should be addressing (IHMO).

        • I am no longer active in this field Malcolm, and no, my focus was on the inner workings of those ‘clean green energy’ prophets and lobbies that are forming. You would be astonished to learn that the very names that were present in the development scam now appear again in the ‘clean green energy’ scam that emerges, particularly in the wind turbine ponzi industry.

          In addition, how do you think Ireland’s resources are being treated in the light of IMF and EU banking mafia running the country? We are nothing but a battery backup scenario for EU energy demands.

          The very presence of Maples and Calder in this inner circle should be a wake up call to the people with an interest, or do you think that many people spotted that before? No, they did not!

          Best
          Georg

          • Malcolm McClure

            Georg: I wrote on this blog a few weeks back about the difference between good money and bad money. There seems to be a widespread opinion here that the objective of good government is to foster the use of good money and try to eliminate bad money. Unfortunately good money circulates slowly and locally, whereas bad money forms the vast majority of money available for investment.

            Investment forms the basis of human progress, so good people inevitably get their hands dirty, of necessity, by having to deal with bad money and the bad people behind it. Inevitably, if things are not to descend into chaos, some good people must insist on checks and balances and for this they get well paid.

            In times of economic expansion things run smoothly and capitalism can maintain the pretence of respectability. When there is a recession, people look for scapegoats and phrases like banking mafia and ponzi scheme are shouted from the rooftops.

            IMHO it is unwise to tar everyone in banking, accountancy and law and with the same brush. Many of them are merely custodians of the Augean Stables. They too provide a public service.

          • Hi Malcolm,

            This is not about taring all bankers and law firms, but if you think that Maples and Calder are in the ‘good money’ business, think again, or better educate yourself on what they were and are into. Hawkish is just the first middle name.

            They surrounded themselves with good company on the caymans, the biggest bastards in history joined them there!

            Why did NO ONE ask the questions to date:

            1. WHEN was M&C welcomed with open arms to open their office in Ireland
            2. WHO asked them to come and WHY?

            I know it, and so do probably you and a handful of others, but does the public know, or I should better say even WANT to know? Observing this tragedy since 2007 closely, I came to think that Ignorance is the overwhelming attitude in Ireland, some call it conservatism.

            The IFSC is the epitome of what is wrong in this country, just go there and look at the company brass plates, it tells a fascinating story,

            Your dualism of good and bad is flawed I am afraid. The entire system is flawed be design and on purpose I might add! Who do you think controls central banks?

            Saying that ‘Investment forms the basis of human development’ strikes my as simplistic, and before you say it, I reject the term HUMAN CAPITAL!

            Best
            Georg

  16. vincent

    Yes, the Land is where it’s at, Land needs to be made available to more and more people for a Real sustainable solution, Real decentralisation needs to happen, Common sence needs to make a comeback. Ar ais go dti an tallamh…

  17. [...] 0.75% Loss of faith in banks drives sale of home safes Ireland tops Greece with biggest deficit We must go back to the land Diehard risk-takers get back in the saddle Few mortgage brokers hopeful of recovery Irish [...]

  18. Deco

    [ We must go back to the land ]

    the problem with agriculture is the level of work required. Whether it is Americans paying Mexicans to pick the fruit, or English farmers paying Poles to hoe the vegetables, everybody wants somebody else who is prepared to do the work.

    It is hard hard work. “Here lies Farmer Jack, who worked the land til it broke his back”.

    Same applies to Fishing. Acquaculture is another failed effort at realizing a massive production potential in Ireland.

    If you want to know the problem with acquaculture, go to the far South West and ask the people in the sector about how difficult it is to deal with government bureacracy.

  19. And if a significant land tax doesn’t also apply to rural land, David, the big speculative rent-seekers will be back into buying Irish farms, too.

  20. Philip

    If the india, china and the likes are going to have such massive demands, all that’ll happen is that the mainland Europeans will take over this place and not trust the paddies to run it. The land will have everything exported off it and the paddies will pay top dollar or yuan or rupee for it.

    If we cannot control and take benefit from the billions of euro from the corrib gas line, what hope do we have of taking control of our land , our wind etc.

    Yes, there will be mega cycles. However, the irish will – as usual – not benefit one jot from it. The gombeen element will sell the country to the highest bidder and leave the rest of the population out in cold.

    David, Ireland has stacks of potential to lay waste to all our problems economic and fiscal in a matter of years. Energy amd Agriculture are but 2 items. What we all need to recognise is that the powers that be are simply waiting for the next wave to screw the rest of us so they can (as in Sasoon’s poem) toddle off and comfortably die in bed.

  21. adamabyss

    There is some great writing done on this site, including David’s of course. It should be preserved for posterity. I just wish more people would listen, learn and implement the myriad good ideas and suggestions that emanate from here.

  22. Policy and Choice…. free download

    Via Liam Delaney

    Policy and Choice
    Public Finance through the Lens of Behavioral Economics
    William J. Congdon, Jeffrey R. Kling and Sendhil Mullainathan, Brookings Institution Press 2011 c. 247pp.

    http://www.brookings.edu/press/Books/2011/policyandchoice.aspx

  23. Does anyone know can this type of Willow grow on bogs. I see where it is being planted on good farmland and it seems a waste that we are importing so much food which could be grown there. Also does Willow exaust land, (this is an effect where the topsoil loases nutrition and becoms like yellow sub soil?)
    Also just wondering is the banning of the small timw turf cutter realy about big bussiness & their puppet governments wanting to manopolise the biomas energy longterm?

  24. !!!RTE BREAKING NEWS!!!!

    WAR BETWEEN IRELAND AND GERMANY OFFICIAL

    In a first strike scenario Ireland attacked Germany with weapons of mass stupefying, while this is not a first in modern warfare, never before in history has a strike on such a scale been undertaken, it is beyond anything wepons manufacturers could dream of today, the total output will effect approximately 50-60 million Germans within 2-3 days after the hit.

    It is not clear whether a military counter attack can be accomplished by german defense forces anymore, so severe are the damage projections.

    Jedward left for Berlin.

  25. Hmm, David the grass grows with out any input or attention? You most wear rose-tinted glasses…If oil increases as it will no doubt who can afford the shipment cost to Asia? The new holy grail of paddy land
    we will sell them milk they can not digest! surly we will supply them with a remedy from Rinaskiddy…
    Lads get it, growth is a myth and if we follow this path, we end up, as David showed once, on one of his TV programs, like the Maya’s but does David remember this????
    Or is he playing tunes according who feeds him?? David are you like our politicians??? Than have the honesty and stop fooling us… but if you are one of them ….. you will play the tune’s some one else pays you for…. the answer is blowing in the wind …… who hears it? David are you?

    • Tell us if you string us along, or if you are rely concerned for us as, much as for yourself!

    • Most economists are to some great or small degree working for or getting paid by big businness interists, but they can still stimulate your mind in to figuring out whats ahead. In fairness to David his writings & books did explain many of the dirty tricks of the Irish traitor class to the working class (many of who still thought of themselves as middle class at the time, untill they recession bit).I read his books and avoided the traps, was well worth the purchase.

  26. Fair good article David, miles better than that Royal London Trash you wrote last week.

  27. paddyjones

    Agri and energy are very capital intensive and we can see that there is very little capital about the place. In fact capital is leaving the country, not being invested here.
    If I were investing the last place I would invest is in Ireland. Even our minister of finance invests his savings outside Ireland.
    Allocation of capital is a major economic driver, we have all seen the massive allocation into property over the last 20 years and for the next 20 years most capital will go on servicing property debt in one form or another.
    Return on capital in the Agri sector is still poor compared to other sectors so investment will not favour Agri. Agri companies in the US for instance are defensive in nature while enjoying the some of the best fundamentals in any sector.
    Companies such as Kerry and Glanbia are quite stable and well run but the returns are modest, they are defensive plays.
    The only way in Ireland to invest in renewables is through Rabobank but returns have been 2.2 % per year over the last 5 years.
    Would I invest in Agri ….yes returns are stable high single digit, would I invest in renewables ….no , its too long term and returns are low.

  28. Philip

    I think Elfielf & Paddyjones are spot on. We are forgetting about logistics (owned anyway by non Irish and fossil fuel dependant – so there goes your margin) and the lactose intolerance of Asians. We are also underestimating just how good and ingenious the asians are in farming.

    If Ireland is to survive it has to grow both from within and deliver on exports which are light to zero weight. Oh dear! Knowledge economy strikes again!

    There are 4 areas of growth
    1)Knowledge Industry from Software to Pharma to Finance and very hi value lightweight industries.

    2)Wind for energy export and modern sailing fleets – sails for big carriers. We should be actively solving the costs of logistics. We should have a more developed sailing and aeronautics industry

    3)Weapons and tools. This is the secret to all rich economies. No respectible economy shuld be without its own tooling and weapons building capability.

    4)Lawnmowers. Ireland has some of the most arduous conditions for cutting grass…yet most of the main makes come from places where they rarely see grass.

  29. After Fukushima…. EU Lies and corrupted Stresstests on EU Nuclear Power plants!</b

    I thought this is an essential thing for everyone to understand, and somehow, it is of course directly linked to economical power dynamics, hence worth enough to post on davids economy site.

    We know how the very meaning of stress tests can be described as dependent on the lobbies Interests behind the very industry that has to undergo a stress test, right? Banking Stress test, you remember the farce.

    Here is another act from the theater of EU dimwits and corrupted politicians that is stereotype for a dysfunctional 'democrazy' where politicians no longer serve the public but exclusively the interests of corporations.

    The EU Energy Ministers, the german Version of Guenther Oettinger is a extreme case of a deranged political puppet, however, he currently hold the Eu portfolio on Energy, decided in a meeting in Hungary that all EU nuclear power plants will undergo a extensive and enhanced stress test scenario.

    27 EU head of states agreed to this procedure to scrutinize all 146 power plants with additional scenarios, in particular, power supply fail safe, cooling, human error, etc.

    Then you have the national regulating bodies, and they are a different cattle of fish all together. – Patrick Neary was our financial Regulator who was rewarded handsomely for looking the other way, remember? Do you think the same principles of dysfunctional regulation would not apply to the nuclear on other industres, you are mistaken, read on… –

    Especially, the protection ion of the public in case of a nuclear disaster, was refused to be part of a stress test scenario by the regulators, watch dogs and other institutions that belong to the INNER CIRCLE of the nuclear lobby.

    So the political puppets meet again, and Oettinger suggested that those who want to undergo a more rigid stress test are free to do so, but not mandatory.

    Now guess who is pressuring to loosen the conditions for test scenarios. Of course, UK and France are putting on the pressure, France has 58 nuclear plants and UK 19.

    On top of all that, independent experts will be denied access in this stress test scenario, so it ends up being a farce, the plant operators will write a piece of paper, the stress test and send it to the commission. – RIGHT!

    London announced that they will NOT publish the beyond doubts absolutely foreseeable Results.

    This is our EU ‘democrazy’ at work. It is rotten to the very core on all accounts! I wonder when someone will start to organize a european wide protest against the EU commision/government, traveling from all over Europe to Brussels and bring this city to a standstill.

    What is required? I guess a nuclear accident alone might not be enough, although this depends on how the wind blows….

  30. You could not nail it any better, although I would most definitely take the brackets and questionsmark on ECB :

    These countries’ leaders (and ECB?) reputedly apply pressure to kick the can down the road for their banks (and themselves) at the expense of Spain and Ireland.

    These countries refer to the owners of debts, Germany holds 12% of their GDP in Ireland and Spain.

    Euro was invented to try to force political union, end conflict (Kohl’s dream), but its denouement is having the opposite effect.

    +1

  31. Morning,

    If we are in an agricultural and energy megacycle based on demand and diminishing supply, how should we react? This is the question. I don’t have the answers, and some of my views appear contradictory, for example I believe cities are a force for human creativity – having read Jane Jacobs many years ago, I remain convinced of her position on cities. As for rural Ireland, there appears to be a great opportunity, maybe the Irish problem is logistical, but surely we can overcome this.

    Best,

    David

    • adamabyss

      I have not read Jane Jacobs, David, but I will certainly check her out over the summer. However, I would point out that there was plenty of human creativity going on BEFORE the advent on cities, for millennia in fact. The cities (with attendant problems) would not have been ‘created’ in the first place were it not for the ingenuity and resourcefulness of man, which in itself has led to the problems of our success – overpopulation and not enough of everything of everyone, which is of course exacerbated by the obscene hoarding of wealth that goes on everywhere, in every nation, on every continent by a perversely small clique of greedy and evil people – the so-called ‘elites’.

      I agree with your statment on the opportunities in Ireland. Let’s hope for the best. Your new article which will follow here later today is brilliant.

      Adam.

    • Colin

      David,

      I haven’t read Jane Jacobs, but I can tell you there are two types of cities, good cities and bad cities. A good city in my opinion is Vienna, a bad city is Los Angeles. Cities should be stress-free, quiet, infused with green spaces and nature, full of amenities, home to young and old and all in between, built with aesthetics and consideration for all with communal spaces and so on.

      I guess you can also say there are two types of countrysides too, good functional well planned farms and villages, then bad bungalow blitz polluted streams and rivers and litter infested landscapes.

    • I think the politically desired tendency is towards a supranational solution, at least this is what indicators from Brussels would suggest with reference to the energy crisis inevitably on the menu.

      As for agri, I know nothing about it in technical or logistical terms, but I know this, we all would be required to re think our consumer behavior and also demand certain things from politics, such as a clear and demystified explanation of ingredients on food packaging, such was proposed in a very straight forward way, a ample system green/yellow/red, was worked out but…. surprise surprise, the lobby pressure in Brussels prohibited this to become reality.

      When I say re think consumer behavior, then I suggest that equally we wake up to the reality that we as consumers hold a massive power in our hands. Boycott of goods for example is one option.

      If we would start to boycott american products, such as Coca Cola, Mc Donalds and demand the IMF to leave the country, depending on the scale such things will have a reaction.

      If we continue to support the ways of the mega food industries, we are on the hook. Dioxin in eggs, chicken KZ’s, valium in pigs, the list is endless.

      But yes David, I find it utterly ridiculous to stand in a Super Value and see that parsley from Israel and green beens from Kenya.

    • Hi David,

      I agree that cities are and will continue to be the great driving force (engine) for human activity, but rural areas will continue to be the vital source of fuel for this engine. In this context, Ireland needs to focus on the various supply chains (food, energy, water, information, communications, transport) that are at play between these two great drivers of development and ensure that they are as efficient and effective as possible. In essence, infrastructure (logistics) needs to be a key focus. If we can streamline our supply chains and concentrate our efforts on becoming the best in the world in a few key areas that we are very strong in we will go a long way. Look at New Zealand for example, they are the world-leaders in terms of dairy products, mussels, mutton and other food products. New Zealand’s farmers are market oriented (unlike the subsidy-focus that Irish farmers often have because of CAP) and their supply chains are 2nd to none. We need to model New Zealand and apply their practices to our own context.

    • michaelcoughlan

      Produce as much food as you can yourself in your own back garden which is much easier than it sounds (e-mail me for a few tips if needed). Reduce, reuse, recycle, insulate your house, install vacuum solar tubes to heat water, install a wood burning stove that heats water, use your own well and bio treatment system and purchase a vehicle which runs on renewable energy if possible. You can also convert your oil boiler (condensing boiler preferably) to run on bio diesel. Purchase organic produce only if it’s competitively priced which it is in Lidl and Aldi and/or buy at farmers markets again only if competitively priced and good quality.

      I have most of these already so if anyone wants to have a look then no bother.

    • Gege Le Beau

      “the Irish problem is logistical, but surely we can overcome this.”

      This gave me a great laugh thanks David, especially after all we have been through.

      Issue is more psychological than logistical, fumbling in the greasy till to an astonishing degree. Elites caught out but still Jack and Jill pay.

      • michaelcoughlan

        Only you Gege could make a connection between McWilliam’s point and the failed sociopaths who have brought our country to its knees. Perhaps you should be writing fiction.

  32. As I went looking for a mail from last year I came across this quote here:

    THOUGHTS ON GROWTH
    Every increment of added population and every added increment of affluence
    invariably destroy increments of the remaining environment.
    Population growth and increases in affluence make it impossible
    for reasonable increments of improved efficiency in the use of resources
    to enhance or to preserve the environment.
    You cannot preserve the environment by accepting the population growth
    and the increased affluence that are now destroying the environment.

    - Albert A. Bartlett; Professor Emeritus of Physics -

  33. I think eugenics was tried in German ovens and we agree it didn’t work.

    As a pacifist, I don’t think the world is made safer with capital punishment, Obama assassination squads, shoot to kill, water boarding, wars eg IRAq, Afghanistan, injustice, or the manipulation of world food supplies through financial instruments manipulating commodity prices causing death to millions in the third world.

    Take care of humans and the environment will become safe even taking care of itself:)

    Disagree with Bartlett above, its not population growth that is the problem, but destructive actions by individuals that give rise to unhealthy populations that destroy the environment through exploitation or ignorance or both on an individual and population level.

    Bartlett want to throw the baby out with the bathwater:)

  34. Osama’s Purse

    Why did Osama hold €500 instead of $500 does he have more confidence in the Euro?

  35. au-gay

    David,

    I have already commented on this aspect – more than two years ago – when Mary Coghlan (representing 3% of GNP) was sent to speak for Ireland at an International Conference.

    Holland, with a land mass the size of Munster, 50% of which is below sea level, supports a population of almost 17 million. Its House of Representative (Dail) has 161 deputies – 1 per 100,000.

    One of its principal exports is Agricultural produce, including flowers.

    Need more be said?

    We keep looking to Brussels & to the USA.

    Forget it. Brussels wants our money (or anybody’s to fund their runaway bloated whale) and the USA want to dump their surplus grain (Wheat; soya etc…)

    Wise up and build 2 Water-De-Salination Plants (WDP); one off the coast of Clare & one off the coast of Donegal.

    The project will cost millions – yet, probably no more than is being thrown at Bank Executives (and TD’s)in Ireland.

    Employment on the projects will be huge and last several years. It should absorb almost the entire, vast army of Welfare recipients and be augmented with a team from the prisons, who might be dragged away from their colour TV’s and given a taste of real hard labour.

    Properly structured, 2 WDP’s could provide potable water, which is becoming a scarce commodity; wave-power that could supplant the ESB’s current programmes; and the system could be designed to filter out & harvest fish.

    All of these are Value Added, in contradistinction to 100 plus surplus TD’s.

    In fact, it might be possible to provide Public Transport, connecting all the coastal Spatial Hubs at minimal, if not zero, cost.

    A dedicated Ministry of Communications, headed by someone of the calibre of Michael O’Leary, would be able to undo the disastrous, incompetent mismanagement of Mary O’Rourke; Martin Cullen and their ilk.

    And a dedicated Ministry of Natural Resources should replace Agriculture; Fisheries; Forestry & God knows how many NGO’s & Quangos.

    Our rivers; canals and lakes could be cleaned out & stocked with fresh water fish. Our mountains could be explored for mineral resources; There are thousands of acres of agricultural land that is being “set-aside” by the lunatics that have taken over the asylum in Brussels. Our oak forests could be regenerated.

    Surely we can grow fruit; vegetables; flowers; root crops; animal feed; maybe even vines?

    We can process; we can offer farmers and producers a fair price for their products and if Tesco & Associated British Foods et al find that their margins are insufficient (currently almost 10%), they can leave.

    No shopper in Ireland will really miss them.

    Ireland should set a target of feeding and watering Europe.

    All it needs is competent and determined management at the top.

    Not the milk-sops that bang on endlessly about the problems; 1916; and the “working man” – if there is still such a person.

    Is mise.

  36. [...] 0.75% Loss of faith in banks drives sale of home safes Ireland tops Greece with biggest deficit We must go back to the land Diehard risk-takers get back in the saddle Few mortgage brokers hopeful of recovery Irish [...]

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