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Irish agriculture on the brink of extraordinary growth

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There is plenty of milk product building up.

There is plenty of milk product building up.

There is plenty of milk product building up.

From March 31, milk quotas will be a thing of the past in the European Union. For the first time in 30 years Irish farmers will be free to produce milk in response to increasing global demand. This will result in at least 10,000 jobs across rural Ireland in the next five years. Over that time, Ireland will be the world's fastest-growing dairy producer.

There will be challenges, of course. Complacency is not an option, but the medium- to long-term outlook is positive.

We are building this growth on the competitive advantage conferred by a natural, grass-based production system, on a strong international reputation for high standards of quality and food safety, and on the kind of resilience and ingenuity that has seen our dairy co-ops build global brands and reputations. These factors are the bedrock upon which Ireland's dairy success is built.

Big players are investing in Ireland in the build up to quota abolition. Today, the Taoiseach will officially open Glanbia Ingredients Ireland's Belview facility in Waterford. This project represents a €185m investment worth €400m to the local economy providing 1,600 direct and indirect jobs.

The project is the largest indigenous infrastructure investment by an Irish company in 80 years. As well as marking a hugely positive development for the company it will also represent a source of both tangible economic benefit and optimism for their 4,800 farmers. Others have also shown their confidence in the sector. Danone announced a €50m doubling of capacity in its infant-formula manufacturing plant in Macroom in Co Cork in 2010. Kerry Foods are completing a global innovation centre - involving the creation of 900 jobs - in Naas, Co Kildare; Dairygold is investing €120m in a phased project to incrementally expand its production capacity; and Lakeland Dairies has recently began a €36m investment in an expansion of its milk-powder processing operations at Bailieborough, Co Cavan.

Some 40pc of Irish dairy trade is destined for international markets, with this trade worth approximately €1.24bn in 2014. Last year, Irish dairy exports to Saudi Arabia were broadly comparable to that of the United States.

When we think of traditional trading partners, countries such as the United Arab Emirates, Mexico, Algeria, Vietnam, Kuwait and Jordan may not be the first to spring to mind - but these countries accounted for a combined total approaching €240m in dairy product exports during 2014. Such examples simply serve to highlight some of the new and exciting frontiers for the Irish dairy sector. Exports to Saudi Arabia/UAE and North America increased by 19pc and 18pc respectively in 2014. Developments in China have been staggering - with a tenfold growth in 10 years the market is now the second-most valuable export market for dairy, compared to 13th in 2008.

Price volatility is the key challenge for the dairy sector and, in particular, for farmers over the next period. Economic recovery is not just about jobs in urban Ireland, it is very much about balancing the opportunities for our rural economy with those of our towns and cities. Agri-food is proof of the extraordinary potential across rural Ireland if we harness it with a vision for the future, with the commitment of farmers and processors and with the right policy and government support framework.

Simon Coveney is Minister for Agriculture

Irish Independent