Surge in agri-food exports leads to revised targets for vibrant sector

FIVE YEARS ago, Irish agriculture was being seen as a “sunset industry”; now the sun seems to be rising, fast. This week, Minister for Agriculture Simon Coveney announced a 13 per cent increase in agri-food exports in the January to May period.

He predicted growth of more than €600 million for the second consecutive year and said the programme put in place to increase exports, the 2020 Food Harvest Report, was already ahead of target in some areas.

The report, which has the backing of all industry stakeholders, targeted an increase of 20 per cent in the value of beef output in nine years, but had to be upgraded as the value of beef exports had already increased by 10 per cent.

The Minister said setting a new target of a 40 per cent increase in the value of beef exports was just one of the many indicators of the vibrancy in the sector.

The optimism is based on the growth of the world population which, in 1999, crossed the six billion threshold for the first time; in 2012, it will reach seven billion and, by 2025, eight billion.

Currently, Ireland produces enough food to feed 36 million people. By 2020, it wants to be in a position to provide enough food for 50 million people.

The global view that higher food prices and volatility in commodity markets are here to stay, according to the OECD and the UN Food and Agriculture Organisation (FAO), is another factor in the jigsaw.

The recently published OECD-FAO Agricultural Outlook 2011-2020 said a good harvest in the coming months should push commodity prices down from the extreme levels seen earlier this year. However, the report stated that, over the coming decade, real prices for cereals could average as much as 20 per cent higher and those for meats as much as 30 per cent higher compared with 2001-2010.

The growth in urbanisation, especially in Asia, where an expanding, affluent sector of society is seeking more beef and milk, and moving away from vegetable diets, is a prime target for Irish exporters.

In addition, the shackling of Irish dairy production imposed with EU milk quotas in 1984, is ending and, from 2015, Ireland is likely to be allowed produce as much milk as it can sell.

One interesting statistic produced by the Minister was the fact one in six infants in the world now feeds on infant milk formula produced and processed in Ireland.

The buzz around the agri-food and drinks sector has been picked up elsewhere; over the past three weeks, banks, business consultancy firms and legal companies have been staging agricultural conferences.

One of these in Croke Park, presented by iQuest, was sponsored by KPMG and Ulster Bank and endorsed by the Food and Drink Industry Ireland.

The secretary general of the Department of Agriculture, Tom Moran, said never in his career in the department had there been more interest in the sector.

“The place is buzzing both inside and outside, and there is a growing confidence about the place which I have not seen before,” he said.

A number of hurdles remain to be crossed, however, including reform of the Common Agricultural Policy and possible damage from trade agreements with Latin American countries.