Shocking graph shows raw reality of our agri sector
This graph (below) gave me a bit of a shock when I first saw it last week. After all, we're constantly being fed the line that the food sector is thriving on the back of unchecked growth in global demand for food.
Bord Bia have lots of nice glossy publications highlighting the record food exports that the sector has been achieving in recent years. So how could that line for agriculture be bumping along so miserably at the bottom of that graph, with only the ravaged construction sector for company in the last couple of months.
"Surely it's wrong?" I asked my colleague.
But the numbers behind it are gold-plated CSO stats.
Still not satisfied, I showed it to the wonderfully unbiased eye of Trevor Donnellan in Teagasc's economic analysis unit. "It's all true," he admitted. "We actually produce the same from the land today as we did 20 years ago."
But what about the huge growth in farm size over the last two decades? Herd size has almost doubled and, combined with better breeding and feeding, milk output per farm is almost three times higher.
"This is the trap that most people looking at the sector fall into," said Dr Donnellan. "You need to remember that there is only a third of the number of dairy farms here today compared to 1990."
But wasn't it the imposition of milk quotas that restricted growth in our dairy industry? "You could argue the opposite in fact," replied the Teagasc analyst.
"Arguably, quotas protected the sector more than they constrained it. This was reflected by the fact that Irish farmers were leading supporters for the retention of the system until relatively recently."
The sad reality is that the dairy sector is one of the best performing ones in terms of maintaining overall output. Cattle output has fallen 5pc in the last 20 years, while sheep numbers are half the level they were in 1990. Pigs, poultry and, curiously, mushrooms are the three exceptions within agriculture to this rule.
So how come there is so much razzmatazz around our burgeoning food industry?
The key word here is industry. Farming and food production are lumped together in most people's minds. But there is a tale of two cities within these two sectors. While the output of farming has been in decline, the contrast with the food processing sector over the same period couldn't be greater.
Over the last 20 years we've witnessed the rise and rise of not just world-class companies such as Kerry, Glanbia and Kepak, but also countless success stories at a more local level like Glenillen, Country Crest, Keogh's Crisps and Truly Irish to name but a few.
The key thing that each of these businesses have achieved is that they have increased the value of their primary produce by multiples through the use of innovation and technology.
Be that in a farmyard with Tom Keogh deciding to fry his spuds before flogging them or on a 100-acre campus in Kilkenny where Glanbia realised that the former by-products of traditional products such as cheese and butter could provide the spring-board into highly lucrative performance nutrition markets.
By adding value to the primary produce at the farmgate, the food processing sector is now close to three time the level it was in 1990.
Contrast that with the farm sector, where earnings from the market-place provide about a third of farm income on average – the rest comes from farm subsidies and state supports.
To be fair to farming, the multiplier effect of every euro earned (or received through subsidies) is much greater than the equivalent for almost every other sector.
"It can vary a bit depending on the sub-sector of agriculture that you are looking at, but the rule of thumb we use is a multiplier of about two," said Dr Donnellan.
"In other words, the overall impact of agriculture is about twice the size of the sector. So 100 jobs in agriculture supports 100 jobs elsewhere in the economy."
But realising the realities about our primary food production sector should also provide a cautionary tale for those pinning their hopes to the mast of the Government's ambitious Food Harvest 2020 targets for the agri sector.
"The Food Harvest targets have been endorsed across the farm and food industry," cautions Dr Donnellan.
"However, if the experience of the last 20 years is replicated, growth on the food processing side will not automatically guarantee a similar outcome inside the farm gate.
"Farmers face a significant challenge to reap the benefits that the targets promise for the agri-food industry and wider economy." Farmers need to keep adopting new technology and get bigger to stay competitive.
It's a stark warning for our food sector leaders. If they want to keep the tills humming, they need to keep as many farmers pumping out as much food as possible. But the way the graph is trending does not bode well for the agri-food sector of 2033.