The Central Bank of Ireland has published new research on the economic impact of Irish agriculture and the challenges facing the sector.
The analysis shows that following a period of stagnation from 1990 to 2010, agricultural output has increased significantly over recent years.
In 2017, the overall volume of gross agricultural output was 21% higher than in 2010. Much of the rise in output has been driven by the dairy sector following the removal of milk quotas in 2015.
Around two-thirds of farms have no farm business related debt, although variations among sub-sectors are again apparent. 60% of dairy farms have debt, compared to one-third of cattle farms.
In 2017, just over 40% of agri-food exports went to the United Kingdom. Tariff and non-tarrif barriers associated with a hard Brexit, coupled with existing viability problems, would pose significant challenges, with the beef sector particularly vulnerable. However, the growth in exports to both the EU, excluding the UK, and outside the EU over recent years is notable. In 2005, exports destined for non-EU countries accounted for 21% of the total; in 2017 this figure had risen to 31%. This points to a degree of greater diversification in market sales by Irish exporters.
Commenting on the research, Deputy Governor Sharon Donnery said: “Agriculture makes a significant contribution to the Irish economy. However, Brexit continues to pose huge uncertainty to the Irish economy overall, and today’s research spells out the specific challenges faced by those working in the agri-food sector across the country.
The increase in exports to markets outside the UK is to be welcomed and can be built upon, but the fact remains that a hard Brexit, which reduces market access for Irish exports, would have a material negative effect on Irish agriculture and adjusting to this in the short-term would prove a considerable challenge.”