Irish
Rural Development 2025 Report: 10,000 full-time Irish farmers; Most Irish-based Foreign Manufacturing Enterprises lost to low-cost economies by 2025
By Finfacts Team
Nov 16, 2005, 15:54

Only 10,000 full-time Irish farmers will be left by 2025 compared to just over 40,000 now if current trends continue, according to a State-funded report launched today by Minister for Agriculture Mary Coughlan

The Rural Development 2025 report was produced by an Inter-Institutional Working Group drawn from the universities NUI Maynooth and UCD and the State agricultural agency Teagasc. It is an assessment of the prospects for rural Ireland to 2025.

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The Intel Ireland campus, at Collinstown Industrial Park, Leixlip, County Kildare is Intel's fourth largest manufacturing site overall, and the largest outside the United States.

Intel, Dell, Pfizer and HP are foreign-owned manufacturing firms in Ireland responsible for 90% of Irish exports. The report predicts that most of these enterprises will have moved to low-cost economies by 2025. Growth in exports from the dominant indigenous enterprises will remain relatively low.

The Report says: "It is unlikely that by 2025 Ireland will have appreciably more than 10,000 full-time commercial farmers, comprising predominantly dairy farmers, 1,000 or so commercial dry stock farmers, with roughly a similar number of sheep producers and a few hundred pig enterprises," it says.

In its Executive Summary, the Group says that Government policy for rural areas aims to build a rural economy where enterprises will be commercially competitive without damaging the environment. It seeks to have vibrant sustainable communities, with a quality of life that will make them attractive places in which to work and live. It aspires for equity of opportunity between rural and urban areas, and for balanced development between the regions. These initiatives are underpinned by EU policy for rural areas, which subscribes to the attainment of ‘living countrysides’ within the context of balanced regional development across the Union.

The Group raises two questions:

Are these goals being achieved?

Can they be achieved?

It says that if a scenario assuming no major changes in current trends, other than those already signalled, will result in serious failures to achieve the declared policy goals for rural Ireland. Although the aggregate headline indicators in the national economy are positive, they mask some underlying weaknesses that adversely affect prospects for the rural economy. On current trends the following outcomes are likely by 2025.

  • There will not be an acceptable regional balance in Ireland’s economy; population, commercial agriculture and modern enterprises will be even more concentrated in the east and south than at present.
  • Rural areas, especially in the northwest and north midlands, will lag behind in respect of communications and other infrastructure, particularly as EU funds will not be available for their further development.
  • There will be dramatic reductions in farmer numbers, lower agricultural prices, and widespread decline in commercial farming.
  • Lower volumes of farm output will threaten the viability of agri-food processing enterprises.
  • Forested land area will almost double; however, the value of forestry and wood product output will not increase to the same extent.
  • The marine sector will not have reached its inherent potential, especially in terms of valueadded in the seafood and renewable energy sectors.
  • Provision of public goods from natural resources, including carbon sequestration by forests, will not be achieved in the absence of adequate attention to the valuation of these public goods and arrangements to pay their potential suppliers.
  • The rural landscape with Ireland’s rich natural and cultural environment will be under continued threat.
  • Developments in the broader rural economy will not offset losses and other weaknesses in the natural resource sectors. Growth in exports from the dominant indigenous enterprises will remain relatively low. Moreover, it is likely that a large part of manufacturing output from foreign owned enterprises will move to lower cost economies. In these circumstances, employment in building and construction will not continue at current high levels.
  • New types of employment will not benefit the many rural communities outside of commuting catchment zones.

What Future Could Be Achieved the Group asks?
  • Rural Ireland in 2025 could be closer to the situation envisaged in the goals for national policies. However, this requires taking action now on the following:
  • The National Spatial Strategy, implemented in conjunction with successive regionally focused national plans, would result in a more balanced distribution of population and economic activity throughout the country.
  • Rapid communications and supporting infrastructure would provide greater accessibility throughout all parts of the country.
  • The rural economy could sustain more competitive enterprises through the development of additional entrepreneurial and management skills, as well as further innovation in products, business organisation and marketing.
  • The agri-food industry could have more developed business, technological and innovative capacities, with a widely differentiated product portfolio selling in international markets.
  • Forestry and the ocean economy could be sizeable suppliers to the energy sector and provide valued public goods.
  • Maintenance of an attractive rural environment could be secured by compliance with EU
  • Directives and payment for public goods, as well as better management systems nationally.
  • A knowledge-based bio-economy could emerge built on the comparative advantage of Ireland’s natural resources.
  • ‘Old economy’ enterprises could be upgraded, and manufacturing small and medium sized enterprises (SMEs) could increase their contribution to the rural economy.
  • Tourism could be a vibrant sector of the rural economy, providing knowledge-based environmental goods and services, focused on Ireland’s unique landscapes and culture.
  • Clusters of internationally oriented companies could exploit the full potential of natural resources in food, the marine, forestry and tourism.

Realising Attainable National Policy Goals
  • Overall changes required to achieve the above perspective and the ultimate goals of rural policies are summarised below.
  • Greater commitment to rural and regional development throughout government.
  • Construct an effective institutional framework to ensure that policies respond to the defined needs of the rural economy and rural communities.

Change in the prevailing mode of policy-making, public administration and policy delivery such as that

(i) the rhetoric of stated policy is followed through with clear operational programmes, especially in relation to the White Paper on Rural Development and the National Spatial Strategy;

(ii) public programmes are initiated proactively and are not dependent on Directives from Brussels;

(iii) consultation with stakeholders and the completion of value for money audits prior to commitment of major initiatives.

John Dillon
IFA President John Dillon said today:  "the Rural Ireland 2025 Report is a timely response to the problem of regional imbalance within Ireland, with many rural areas and the BMW region overall falling behind in economic development. However, the baseline projections for full-time, commercial farmers is based on a "business as usual" or "do nothing" approach, which of course I do not accept."

Dillon said "there is very little evidence to-date that the Government's National Spatial Strategy is making any difference to rural Ireland. Furthermore, the threat to manufacturing jobs from low-cost countries and the threat to agriculture from the current WTO negotiations have severe implications for rural areas."

The IFA President said "as regards future employment in farming, the food industry and agri-services, the baseline projection in the report is for 70,000 - 100,000 full-time equivalent jobs by 2025.

The actual outturn will depend mainly on whether or not commercial farming is profitable, and that is why the outcome of the WTO negotiations on agriculture is of vital importance to Ireland. If market prices for farm products fall below the cost of production, the level of national agricultural output will not be sustained.

"A number of the recommendations in relation to agriculture are in line with IFA policy, such as the need for increased scale and competitiveness, and better access to land through leasing and partnerships. It also identifies agriculture's future role in the provision of specialist food, the provision of renewable energy, and recognises the role of farmers in the provision of public goods such as the environment.

Dillon said "in addition to the role of the Irish Government in making the best defence of Irish agriculture in the WTO negotiations and the EU budget negotiations, which of course is vital, I am challenging Teagasc as the national Development Agency for Agriculture, to take on board the competitive future facing farmers and to respond with solutions which will cut costs and increase productivity in agriculture." "As regards the wider rural economy, the key ingredients for development are knowledge, infrastructure, and economic planning resulting in clusters of competitive enterprises. IFA will be studying the report in detail in the near future."

Download the report (in pdf format)

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