ITBA EXPO 2010 Farming during the economic downturn and the potential for growth Rowena Dwyer – IFA Chief Economist January 30 th 2010.

Slides:



Advertisements
Similar presentations
High-Level Seminar on E- Communications The development of the ICT sector during the crisis: International comparisons Information Technology Outlook Graham.
Advertisements

France Economic Outlook by Alain Henriot Delegate Director, Coe-Rexecode Kiel - 16th March 2010.
Economic & Investment Update GK Wealth Management Limited Jim Power Chief Economist, Friends First April 30th 2008.
Storybook 01: South Africa’s Economic Output STANLIB Economics.
Financial situation in Croatia Ivan Dolini ć (Jackson) Student ID: MA2N
The Irish Economy JUNE IrelandGreeceEU Population4,588,252 (2011)9,903,268 (2011)503,679,730 Area84,420 km2131,990 km2 Gross GDP figure€144 billion€227.
Irish Agriculture – Future Opportunities The long-term prospects for agricultural products are positive: Need 60% more food and feed by billion.
Rural Economy Research Centre Situation and Outlook Conference Inputs market Trevor Donnellan, Rural Economy Research Centre (RERC) Teagasc, Athenry, Co.
Bence Tóth, European Commission The situation of the dairy sector in the EU.
Structure of the Food & Fiber Industry Linkages to the Farm Business Sector LESE 306 Fall 2008.
The National and International Economy What is macroeconomics? Macroeconomics considers the performance of the economy as a whole.
Future Financial Forecast An update on the big economic picture for credit, interest rates and inflation. Paul Cahill Chief Executive Officer.
World Agricultural Commodity Markets, Developing Countries and the Doha Development Round.
The U.S. Food & Fiber Industry Linkages to the Farm Business Sector Spring 2010.
Agri-taxation review and Budget 2015 The Busin€ss of Dairy Farming Post 2015 Rowena Dwyer, IFA Chief Economist 21 st October 2014.
India’s Food Price Inflation: Is Demand Outpacing Policy? Maurice Landes Economic Research Service U.S. Department of Agriculture.
ACTIVITIES OF SUPPORTING SMES DEVELOPMENT IN VIETNAM
Medium-term prospects and impact assessment of the CAP reform EU - 15 & EU European Commission - Agriculture Directorate-General.
Estonia Another crises country. Background and History Details of the relevant history, pertinent to its economic condition. Position of the.
Introduction to Macroeconomics
The Agricultural Sector and its contribution to the economy Johan Pienaar Agri SA.
Developing a Smart, Successful Scotland Charlie Woods - Scottish Enterprise World Bank Seminar Riga - 8 June 2004.
CAUSES OF THE GREAT DEPRESSION. THE GREAT DEPRESSION KWL ON YOUR PINK POST IT NOTE WRITE SOMETHING THAT YOU KNOW ABOUT THE GREAT DEPRESSION ON YOUR YELLOW.
FINANCIAL AND REAL ECONOMY CRISIS AND STATE AID The case of Lithuania Jurgita Ratkeviciute Head of State Aid Division Competition Council.
Global Economic Outlook The Great Recession and Recovery Stephan S. Thurman, PhD Bureau for Economic, Energy, and Business Affairs for Wichita State University,
Overview  Overview of Irish Economy  Key Business Sectors  Skills requirements.
The Challenges World population is projected to grow from 6.5 billion in 2005 to nearly 9.2 billion by Thus global food production must nearly double.
The need for skills and R&D to enhance business opportunities in the digital economy Paul Sweetman Director, ISA and ICT Ireland, Ibec.
January 2006, Budapest Additionality of Guarantee Schemes for Agricultural and Rural Development: Lithuanian Experience Danguolė Čukauskienė Director,
Land – the huge potential of a limited resource Peter Young Irish Farmers Journal.
Higher food and fuel prices: What is the impact on the Thai economy and what to do about it?
Prospects for Sheep Farming Presentation by IFA National Sheep Chairman James Murphy Lismullin Farming Conference Monday January 30 th 2012.
General Directorate of Annual Programs and Conjunctural Evaluations1 15 February 2010 Turkish Economy: Macroeconomic Developments in 2009 and Medium Term.
Update on the Hong Kong Economy for
QB March 2011 Presentation by the South African Reserve Bank to the Portfolio Committee on Finance Quarterly Bulletin March April 2011.
Niagara Falls, October 2009 WORLD AGRICULTURAL SITUATION Niagara Falls, October 2009.
Albanian Economy in the Global Economic Background Altin Tanku May 18 th 2012.
International trade and exchange  Trade existed since time immemorial, in one way or the other. Trade facilitated not only exchange of goods but also.
Rural Economy Research Centre Situation and Outlook Conference, 9th December 2008 SITUATION AND OUTLOOK FOR CATTLE & SHEEP 2008/2009 J. Breen, K. Hanrahan,
MGMT 510 – Macroeconomics for Managers Presented By: Prof. Dr. Serhan Çiftçioğlu.
Structure of the US farm economy EconS350 Fall Semester, 2010.
Impact of Economic Recovery on Irish Business Fergal O’Brien, Irish Business and Employers Confederation Danish Industries 2 nd April 2008.
AQA Chapter 13: AS & AS Aggregate Demand. Understanding Aggregate Demand (AD) Aggregate Demand (AD) = –Total level of planned real expenditure on UK produced.
Eesti Pank Bank of Estonia Andres Sutt Estonian Economy - on the course for soft landing? October 25, 2007.
Hearing on The global financial crisis and industrial changes in the main European manufacturing and services sectors Rodolphe de Looz-Corswarem Secretary.
Lesson L060002: The Scope and Importance of Agribusiness
Global Developments US & UK doing reasonably well Euro Zone growing well below potential Emerging markets in some difficulty Policy will remain very accomodative.
Joe Collins – MD Ornua Dairy Trading & Ingredients
Lesson L060002: The Scope and Importance of Agribusiness
Circular Flow Model and Economic Activity
A2 Economics International Trade A2 Economics Presentation 2006.
FEDUSA 2010 Medium Term Budget Policy Statement Comments The Joint Portfolio Committee on Finance 11 November 2010.
INTERNATIONAL MONETARY FUND JANUARY 2014 The Mauritanian Economy: Performance and Outlook.
Causes of the Great Depression. Possible Causes of the Great Depression Stock Market Crash Over production Unequal distribution of wealth Consumerist.
Agriculture and the Economy: A View from the Chicago Fed May 12, 2016 Detroit, MI David Oppedahl Senior Business Economist
Objective 1.02 Understand economic conditions 1 Understand the role of business in the global economy.
AS Economics PowerPoint Briefings Introduction to Macroeconomics AS Economics.
Dairy sector Promoting the leadership of agro-food industry November 2007 Veijo Meriläinen, President EDA.
Report for the year of 2012 Finance, Accounting and Investment 1.
Dairy market and EU policy developments
The Irish Economy: Prospects in Uncertain Times
Prospects at the Agricultural Markets in Bulgaria and the EU Capital Newspaper and ITC Media Expectations about the International Agricultural Market.
Introduction to Macroeconomics
MEASURING ECONOMIC ACTIVITY
Introduction to Macroeconomics
James Watson, Director Economics
Strategic Policies for a More Competitive Agriculture Sector
Stakeholder consultation on the CAFÉ baseline agricultural scenario
CAP 2020 Consultation Process – Public Meeting Dr Kevin Hanrahan Rural Economy Development Programme Teagasc.
Global economic growth
Presentation transcript:

ITBA EXPO 2010 Farming during the economic downturn and the potential for growth Rowena Dwyer – IFA Chief Economist January 30 th 2010

Agriculture and the Economy Agri-food sector provides an estimated 270,000 jobs - 1 in 7 jobs in the country. Largest Irish-owned productive sector, accounting for over 50% of exports from Irish-owned manufacturing. Exports of €8.2 billion in 2008 represent 10% of total manufacturing exports and account for 32% of net foreign earnings High Value Added Sector – Multiplier of 1.73 v for Chemical Industry

Irish Bloodstock Sector and the Economy 22,084 employed in thoroughbred equine industry – rural employment Gross Value of Industry - €1.1 billion Registered breeders - 10,106 – 93% of whom own fewer than 5 mares Exports in excess of €180 m annually Tourism – 80,000 visitors for race meetings, sales and stud operations

Effects of Economic Downturn A combination of factors are causing serious financial problems on many farms and for thoroughbred industry: –Low product prices and incomes in all the main sectors of farming due to global economic downturn –Weather related problems, resulting in increased costs particularly for fodder, and lower animal production and crop yields. –Cutbacks by the Government in a number of farm schemes and funding for equine industry Horse and Greyhound Fund – Cut of €17 m or 22% of funding REPS, DA, Fallen Animals, Installation Aid, Early Retirement, Suckler Cow – Cut of >€125 m or 25% of funding

Effects of Economic Downturn –Reduced availability of credit in the economy, arising from the crisis in the banking sector –Ongoing weakness of sterling, significantly reducing value of exports to UK Agri-food and drink exports down €1 billion in 2009 Exports of horses down 20% in volume (number) and 55% in value –Reduced domestic consumer demand (-7%) – horses a luxury item

Cost-price Squeeze in Farming

Agricultural Prices and Farm Income Output Prices have fallen in 2009 –Cattle Down by > 12% –Dairy Down by > 30% –Cereals Down by ~ 30% –Bloodstock sales Down by 32% (€30m) –Sport Horses Foal and 3 Year prices Down by ~20% National Farm Income fell by 30% in 2009 –Average Farm Income - €13,000 –Average Farm Income with no off-farm employment - €16,000

Rural Employment Employment in primary agriculture has fallen by approximately 15%, or 16,000 Estimated 15-20% drop in employment in equine industry Employment in food manufacturing has fallen by 18% or 10,000 30% of farmers have lost their off-farm jobs

Challenges in Business Environment Energy Costs –Reducing Energy Costs Essential for Competitiveness – NCC October 2009 –Gap in energy prices between Ireland and EU is closing – Sustainable Energy Ireland January 2010 Access to Bank Credit –Bank recapitalisation - increase lending to SMEs by 10% –NAMA –intended to increase liquidity of banks and increase lending to businesses –EIB Loans for SMEs at competitive rates – AIB, Ulster Bank, BOI – for business development purposes

Challenges in Business Environment Labour Costs –Min. Agricultural Wage Northern Ireland – 25% below Irish Agricultural Wage –Lower labour costs in other European countries – e.g. Germany Broadband Roll Out –Usage marginally below OECD average and far behind advanced countries, download speeds and infrastructure still lagging –Ending of Eircom and ComReg dispute over charges to competitors for supplying broadband over telephone lines – 26 January Dominance of Retail Sector at National and EU level –Statutory retail code of practice and a supermarket ombudsman

Structure and Education Only 7% of farmers below 35, but greater numbers going through agricultural education and training today than in decades –>3,200 undertaking further education courses with Teagasc –Demand increasing for all higher education agriculture courses – 1 st preferences up 50% 2009/08 –Food Routes – Guide to Agriculture and Food Courses – AgriAware January 2010 Economic recovery dependent on competitive exporting sectors, including agri-food

Opportunities from the Downturn Land Use –Agricultural Land prices down 43% in 2009 –Potential for land transfer and consolidation – access to credit –Mobility in land use has increased – 33% of all farms renting over 750,000 ha in 2007 (21% - 550,000 ha ) –Tax-free long-term land leasing – 10/12/15 years Construction costs –Tender prices down by more than 20% - at 1999 levels –Opportunities for restructuring and improving efficiency – at individual farm and industry level Other Input Costs –Feedstuff costs down 10% in increased opportunities through farm-to- farm trading

Opportunities with Recovery Exports –Sterling should strengthen as 2010 progresses as currently undervalued– recovery for main export market –Recovery in main EU markets will lift Irish exports Medium term –Demand for food is increasing globally – quality, sustainable production –Need to add value to produce – move from basic commodity production into higher value markets –New markets and opportunities – agriculture and renewable energy production – Government investment required for development of market

Thoroughbred sector Sterling recovery will benefit thoroughbred sector also Demand remains for high quality output – evidence of strong sales at top end even during 2009 Disposable income down and private consumption subdued –Need to decide on market, produce right animal for market and use high quality breeding stock –Watch input costs –Use best practices on-farm to maximise output and quality – e.g. RACE education and training programmes for ITBA members

What we have to offer

Opportunities for Rural Economy Challenge for actors in rural economy is to coordinate better –Rural unemployment – construction related, slow recovery –Restricitions in public funding in next 5 years Rural Tourism – the Vision –Tourism Ireland – “specialist activity holidays” a best prospect for achieving tourism goals Visitor stays in rural guesthouse – landscape maintained by farming sector Attends local race meeting Eats in restaurant serving locally produced food

Thank you for your attention