Bumper returns make farming 'star of economy'
Published 21/09/2011 | 05:00
The secret's out -- agriculture is flying. Farmers had been doing their level best to brush off suggestions that they were experiencing bumper returns for the last while. But they knew the game was finally up when they listened to President Mary McAleese tell the nation from the Ploughing Championships that farming "is the star of the Irish economy".
While collapsed property prices continue to be the millstone around the neck of the wider economy, farmland prices are actually turning a corner. Even NAMA's boss Brendan McDonagh admitted that he was relying on a buoyant farm sector to hoover up thousands of acres of land which represents 40pc of the state agency's loanbook.
Several golf courses around the country are also expected to be re-absorbed into the food chain over the coming months as negotiations are finalised with local farmers keen to put the redundant fairways back into productive use.
The general public will see the sight of pristine greens disappearing unceremoniously under the plough as a further sign of how far we've fallen. But farmers will look on the events as being only proper. They always considered it a terrible shame that the country's prime farmland was being increasingly consigned to concrete and leisure-time pursuits.
But how did this U-turn happen? Only a few years ago, our government officials had decided that farming was a sunset industry, part of the old economy. The other F, financial services, was where the real action was at.
However, a number of issues were about to come to a head. World supplies of food were not keeping up with demand as burgeoning Chinese middle classes developed a rapidly insatiable appetite for richer, westernised diets, complete with Big Macs and super-sized Cokes.
At the same time, the financial sector's house of cards began to implode. Hedge fund managers suddenly needed somewhere else to sink the billions that they hoarded for investors. Once considered old-fashioned and dull, suddenly every food commodity from wheat to whey powder was where the smart money was going.
The result has been a roller-coaster ride for the farm sector. While once insulated from gyrating world prices through the EU's complex web of tariffs and subsidies, Irish farmers now find themselves buffeted by the fortunes of global markets, with the resultant booms when prices are good and the inevitable busts when prices collapse. Milk and grain have already gone from boom to bust to boom again in the last four years.