September 28, 2015
While at the National Ploughing Championships last year, in truth I felt like a bit of a fraud mooching among the Massey Fergusons. My suburban Dun Laoghaire is about as far from an upbringing in the Irish countryside as you are likely to have on this island.
Yet, when you look a little closer, most of my Dublin teenage friends had at least one grandparent from the land.
Although not so much the case for this generation of teenagers, my generation of Dubs has extraordinarily strong links to farming.
As the Jackeen cousin of a big Cork family, I get reminded of this any time I venture south beyond Newlands Cross. The Ploughing is Irish agriculture. Agriculture is crucial to the economy and the fabric of Irish rural society and it is still the biggest indigenous industry in the country.
Despite the problems with beef prices last year and milk prices this year, Irish farming has the capacity to grow rapidly. There is real value in land, food and farming. The global demand for food is constant and growing.
After all, if the world population is exploding to seven billion, someone has to feed these people. For example, who will provide milk powder to Chinese infants?
It could be Ireland – one of the world’s natural milk producers. Tiny New Zealand has already achieved the remarkable feat of becoming China’s biggest dairy supplier. Why couldn’t we follow suit?
But to get there, the complexion of Irish farming has to change dramatically.
The most successful farmers in the world are Dutch. The old quip that if the Dutch lived in Ireland they’d feed the world and if the Irish lived in the Netherlands we’d drown, is half-true.
The Netherlands does feed lots of the world. It generated a phenomenal €79 billion in agricultural exports in 2013, second only to the US.
That’s over three times the level of Ireland, in a country that has a constant battle with the North Sea and has one of the highest population densities in Europe.
Three times the value with a land mass just a bit bigger than Munster. Now that’s efficient farming, and Holland has one of the highest environmental standards in the world in terms of pollutants used in farming.
So it is possible to dramatically increase capacity to meet new food demand. And we know that the demand for the type of food we produce is rocketing. And the change in the Asian diet is not limited to dairy.
It is a little appreciated fact that when less-well-off people get richer, the first thing they change is not their iPads, their smartphones or their cars as you might expect – people on the move upwards change their diet. When they have a few more shillings, people shift to eating more meat.
We are already seeing this in India and China, where the new middle classes have dropped their traditional diets and are adopting western red meat to indicate their higher, more westernised, social status.
This diet shift comes with its own environmental issues because such a changed diet demands massive increases in inputs, fertilisers, water and so on. But let’s park these concerns for the moment and think about the future for Irish agriculture in the context of these global changes.
There is an enormous global opportunity for efficient Irish farming in a world of growing populations and changing diets. And the figures in Ireland for agriculture bear this out.
Agriculture is still Ireland’s biggest indigenous sector, contributing €24 billion to the Irish economy, almost 10 per cent of all exports and 7.7 per cent of all employment. (According to Teagasc, this figure rises to 10 per cent when all agricultural subsections are included.)
And crucially in a world where industries are footloose and move freely, an industry like agriculture is fixed. It can’t move. (Many industries in Ireland are simply input/output industries, whereby lots of imports come in and they are redirected out to the world from Ireland with very little local value added bar the wages.)
Farming is different because most of the materials are local: the workers, the land, the crops, the fertiliser and the animals. As a result, according to a recent UCD study, every €1 investment into Irish agriculture leads to a €4 return in the economy.
We can see this by the gap between farming output, which is just above €4 billion, and agricultural and food output, which is €24 billion.
This implies a massive €20 billion in value is added from farm to export market. This is huge and would get bigger if farmers adopted the Dutch approach to agriculture.
This economic ratio, which measures how much €1 circulates in the local economy, is called the multiplier. It explains how each euro spent can be amplified.
For example, I buy from you, you employ my friend and pay his wages, he buys something with his wages from me and I employ someone else who, with new wages, buys from you. In economics, your spending is my income and my spending is your income. The more local the trading, the more this applies, and this is what the Ploughing is all about.
Agriculture and food is local. Raw materials are local. Employment is local and sales are local. More than 70 per cent of farming raw materials are locally sourced, as opposed to just 44 per cent for domestic manufacturing companies and much less for multinationals.
But here’s the rub: in order to change to a Dutch model, the essence of Irish country life would have to change quickly.
There could be no place for small holdings. Huge tracts of land, which are now in effect hoarded, would have to be sold and ultimately the very landscape of Ireland would change irreparably.
Is that too high a price? I don’t know. What do you think?