1. THE FUTURE OF RURAL AREAS TO 2031
RESPONSE TO TEAGASC DIRECTOR
GERRY BOYLE’S PAPER
TOM TURLEY
CHAIRMAN OF THE IFA RURAL DEVELOPMENT
COMMITTEE
NOVEMBER 12th 2010
2. While 2031 may appear a long way off nevertheless policy needs to have short,
medium and long-term views. It is very hard to project that far ahead but
many of my comments on Gerry Boyle’s paper relate to the more short and
medium issues, which we can have more influence on.
In setting the context it is important to recognise as Gerry Boyle’s paper does,
the significance of agriculture and rural areas in the Irish economy. This is
particularly relevant in the lead up to the forthcoming Budget and the 4 year
recovery plan.
The downturn in the economy has clearly shown that it is the indigenous
exporting sectors of which the agricultural sector is a major component, which
will drive the economic recovery in future. The Government must prioritise
policies for economic recovery based on a competitive exporting sector.
The Irish agri-food industry is the largest owned productive sector accounting
for over 60% of exports from Irish owned manufacturing companies. It has
low import content, low capital investment and it is deeply embedded in the
Irish economy.
Recent estimates indicate that there are about 260,000 people employed in
agriculture, the agri-food industry and in related services. This represents 20%
of the work force outside of Dublin.
This comes across strongly in the Census of agriculture and GEO Directory for
the Ballyhoura area where there are 5,500 enterprises of which around 2,900
are farms. The further assessment of the additional 270 agri-supply and retail
outlets gives a clear message of the importance of agriculture to the rural
economy.
3. The Harvest 2020 Report is an ambitious target set out for the agriculture and
food industry. The challenges for the industry – can the targets for milk
production (+50%), beef and lamb value (+20%) and pig meat value (+50%)
be met. Investment in capital and research will be required and the
Government, as part of a stimulus package, must show its hand. Increasing
food exports from €8bn to €12bn over the next ten years will be a major
component in the recovery of the Irish economy.
The other main policy, which will form a very significant part of the period up
to 2031, is the CAP Reform post 2013. The key issues as far as IFA are
concerned -
• The size of the EU budget perspective 2014 – 2020
• The size of the CAP budget
• Ireland’s allocation and the
• Role of the EU Parliament in the co-decision making process
CAP reform is the central feature of all agricultural and rural development
policies and it is vital that the Irish Government puts in a huge effort in order
to maintain the Budget and to ensure that the direct payments continue to make
a significant contribution to farm income in underpinning the productive base
of Irish agriculture.
For Farmers, certainty must emerge from the discussions over the next two
years. The role of direct payments is vital and the Teagasc National Farm
Survey highlights their importance, particularly for the livestock sector. Any
reduction will impact on our production base and will affect areas like
Ballyhoura where agriculture is such an important dimension of the rural
economy.
4. Likewise a WTO deal which allows free access for third countries that fail to
meet the standards of EU producers cannot be tolerated.
Policy changes already agreed in the area of milk quotas will bring about a
greater need for land restructuring and research and development to bring
about greater efficiencies at farm and processing level.
In relation to niches that can be developed, I believe that while important
nevertheless their impact will be small in the overall context. Individuals
should be encourages to seize upon opportunities but their contribution in the
current economic situation will be very limited.
As far as IFA is concerned the major issue to solve is the problem of low farm
income.
In 2009 average farm incomes were just €13,000 with the average income for
full time farmers at just €16,000. While there is a welcome improvement in
2010, for many enterprises the price being paid to the producer does not cover
the cost of production.
This collapse in farm incomes in 2008 & 2009 has seriously jeopardised the
ability of farmers to maintain outputs and provide for their families. .
For Farmers to survive in the future there is a need for processors and food
suppliers to take more responsibility to ensuring a viable income for farmers
through better coordination, marketing and selling which in turn will secure a
greater share of the retail price for the primary producer.
Other areas, which need to be urgently considered, are the cost competitiveness
of the Irish agriculture sector. Since 1995 the cost of on-farm production has
increased by over 50% despite major efficiency at farm level. At the same
time the price paid to the farmer has dropped by 7% leaving real farm income
5. at only 51% of 1995 levels. The Government must reduce the cost over which
it has control including energy, waste, bureaucracy and labour. The recently
introduced carbon tax is another example of an additional cost on the agri-food
sector.
One key element of policy over the next 20 years must be agricultures key role
in the environment. The REPS scheme, which was closed in July 2009,
provided a very successful cost effective model for the implementation of agri-
environmental measures in Ireland over the past 15 years. It has brought huge
environmental gain to the Irish countryside and has provided significant
improvements in water quality and biodiversity.
The scheme operated successfully in areas like Ballyhoura and indeed
enhanced its ability to develop other activities in the areas like tourism, food
promotion and other public goods.
The new AEOS scheme while it is not of the same scale as the REPS scheme
can be improved on. IFAs priority in the forthcoming Budget is that the
scheme is reopened again for those farmers who are leaving REPS 3.
Over the next 20 years climate change will also be a major factor in all
policies. In the agricultural sector the mitigation strategy must be based on
maximising the sequestration potential from the forestry sector, recognition of
the significance of the carbon sink in permanent pastures and reducing the
nations carbon footprint and increasing energy security by harnessing the
potential of renewable energy.
In the area of forestry and bioenergy Ireland faces a significant challenge to
meet our environmental commitments on renewable energy generation and
reductions.
6. Ballyhoura has a long history in tourism development and the natural resources
that are present in the area offers great possibilities. The development of walks
is an example of how benefits can be spread in the community through the
accommodation, restaurants and pubs in an integrated way.
The Walkways Scheme has so far developed 1,500km of scenic trails with a
further 426km being developed in 26 areas throughout the country. The
potential of recreational tourism is enormous and the latest Failte Ireland
survey showed that hiking and walking were the second most poplar active
pursuit among those who holiday in Ireland. In 2009 over 800,000 visitors
engaged in walking activity and spent almost half a billion euros. Further
development in areas like Ballyhoura has huge potential.
The challenge for the rural economy is the generation of jobs based on getting
more out of the natural resources in the area. While farmers represent one in
four of the rural population, there are many challenges, which Ballyhoura can
play a key role in e.g. the up scaling of the work force whether it be Farmers or
non-Farmers is vital in ensuring that wider economic benefit can be fully
harnessed.
In conclusion, farmers and rural areas have a huge role to play in Irish
economic recovery. However the Government must recognise this and cuts,
which have taken place in the last 3 Budgets, cannot be repeated. If cuts are
repeated there will be a real threat to the sustainability of the rural economy.