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Structure and Performance Trends in Irish Agriculture 1973-2003
Alan Matthews
Trinity College Dublin
Task of the paper
In the light of the immediate challenges to the future of farming…
… to examine performance and structural change in Irish agriculture in the 30 years since EU membership
Part of the ‘context and rationale for the development of alternative farm enterprises’
Declining role of farming
Agriculture's employment and GDP shares, percent
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Fewer numbers at work in farming..
Labour force in agriculture, thousands
100
150
200
250
300
350
400
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Total AWU Employment in Agriculture, forestry & fisheries
2
More multiple job-holding
% of farm households with off farm job, 1993-2001
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1993 1994 1995 1996 1997 1998 1999 2000 2001
Holder or Spouse Holder Spouse
Trend in gross agricultural output
Gross Agricultural Output Index, 1995=100
60
65
70
75
80
85
90
95
100
105
110
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Trends in input use
Intermediate consumption index, 1995=100
40
50
60
70
80
90
100
110
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Ratio of input costs to output
Ratio of input use to output, per cent
0
10
20
30
40
50
60
70
80
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2002
Per
cen
t
I
New series
The cattle breeding herd
Cow Numbers (thousands)
0
500
1,000
1,500
2,000
2,500
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Dairy cows Other cows Total cows
Growth in milk yields
Yield (Kg per Cow)
2,000
2,500
3,000
3,500
4,000
4,500
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
Growth in sheep and pig numbers
Total sheep and pig numbers, thousands Dec census
0
50
100
150
200
250
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Pig
no
s (t
ho
usa
nd
s)
0
1000
2000
3000
4000
5000
6000
7000
Sh
eep
no
s (t
ho
usa
nd
s)
Total pigs Total sheep
Declining terms of trade
Agricultural output and input prices and terms of trade, 1995=100
50
60
70
80
90
100
110
120
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Agricultural Output Price Index Agricultural Input Price Index Terms of Trade
Aggregate farming income
Real income from agriculture, € million Nov 1996 prices
0
500
1000
1500
2000
2500
3000
3500
4000
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Real Income Index Real direct payments
Number and average size of farms
Number (thousands) and average size of farms (ha)
100
120
140
160
180
200
220
240
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Increase in minimum viable size
Changes in farm size structure, per cent change in various periods
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
<5 ha 5-10 ha 10-20 ha 20-30 ha 30-50 ha 50-100 ha >= 100 ha
%
1975-1980 1980-1987 1991-1995 1995-1999
Increased scale in dairying
Structural change in dairying
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 2000
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Total Holdings with Dairy Cows Average size of herd
Sweeping change in the pig sector
Structural change in the pig herd
0
10
20
30
40
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 2000
Her
d n
o, t
ho
usa
nd
s
0
200
400
600
800
1,000
1,200
1,400
1,600
Her
d s
ize,
no
s
Total Holdings with Pigs Average size of herd
Widespread distribution of suckler cows
Structural change in suckler herds
0
20
40
60
80
100
120
1973 1977 1981 1985 1989 1993 1997
0
2
4
6
8
10
12
14
16
Total Holdings with Suckler Cows Average size of herd
Land market has collapsed
Land transactions
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002e
hec
tare
s
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
€
Aggregate Area Sold Average Price
What can we say about growth?
Growth momentum appears to be exhausted …not because of the exhaustion of productivity
growth… …but because of constraints on increasing
output… …the change in policy priorities to give more
emphasis to environmental values… …and reducing economic incentives
What can we say about income?
Stability in the aggregate income from farming has been supported by increased direct payments
…but no budget to pay further compensation in the unreformed sectors..
… and inflation is eating away at the real value of existing payments..
…off-farm income will continue to increase in importance in farm households
What can we say about structures?
Rapid structural change at the enterprise level.. .. and increasing minimum viable farm size.. .. contrast with the unchanging pace of decline
in farm numbers and employment regardless of economic conditions..
.. and the constipated state of the land market
What can we say about structures?
Support to drystock enterprises is encouraging farmers to hold on to land because of the subsidies this attracts while most of the income is coming from off the farm..
..but drystock is now totally uncompetitive at market prices..
Would funds be better directed at creating viable alternative enterprises to maintain rural areas?
