Agri-food industry needs some brave policy decisions
Published 07/10/2015 | 02:30
The Irish Agri-food industry is undergoing a period of dynamic and rapid change. How our policymakers shape strategies to support the industry's development will determine the contribution this key sector makes to employment and growth for decades to come.
I believe that any debate about the industry's future has to be split in to two distinct issues:
the physical production of food on the island of Ireland,
the development of globally relevant agri-food corporations that are led and managed from Ireland.
These are two very different challenges. What we could produce on farms and in factories located in Ireland may differ from the profile of the companies and co-ops that are establishing global footprints. The former must focus on exploiting comparative advantage in Ireland while the latter should concentrate on creating shareholder value.
When assessing any country's competitive strengths the subject of comparative advantage has to arise. Absolute advantage, in economics, means being more productive or cost efficient than another country, whereas comparative advantage relates to how much productive or cost efficient one country is than another.
Green grass is our ultimate source of comparative advantage. Our geography, ample supplies of clean water and relatively low levels of on farm debt all combine to deliver a knock-out advantage in producing food off grass.
Milk and beef are the two products that best perform in these conditions, and have increasing resonance in a world while provenance is key.