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Agricultural Policy Response to Ireland's Booming Nonfarm Economy

Should agricultural policy in Ireland continue to subsidize farming at current levels or pursue a more vigorous structural adjustment policy to maintain agricultural competitiveness? This article explores the impact of agriculture on Ireland's economy and discusses the future of direct payments, WTO negotiations, and ensuring agricultural competitiveness.

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Agricultural Policy Response to Ireland's Booming Nonfarm Economy

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  1. Agricultural Science Association Conference 2000 Irish Agriculture - Painting the Economic Framework Alan Matthews Trinity College Dublin

  2. The issue • The Irish nonfarm economy is booming • What is the appropriate agricultural policy response? • Should policy continue to subsidise farming activity at current levels… • Or should the opportunity be taken to pursue a more vigorous structural adjustment policy?

  3. Agriculture’s contribution to the Irish economy

  4. EU: Agriculture as % GDP, 1999

  5. Farm Numbers Declining

  6. Direct payments increasing AgriFood 2010

  7. Subsidy element of agricultural gross value added, 1999 4% of GNP

  8. Subsidy element of agricultural gross value added, 1999

  9. Subsidy element of agricultural gross value added, 1999

  10. Subsidy element of agricultural gross value added, 1999

  11. Direct payment share in farm incomes, 1998, NFS data

  12. EU support to farmers (bn euros)

  13. EU and US support per farmer(thousand euros)

  14. Nominal assistance coefficients

  15. Composition of EU farm support

  16. Can support be sustained? • WTO Millenium Round negotiations • negotiations started but uncertain outcome • EU enlargement • necessary to revisit Agenda 2000 • The future of direct payments • modulation • degressivity • decoupling

  17. Agricultural competitiveness at world market prices • Dairying likely to expand • Beef - the big uncertainty • Pigs, poultry, horticulture to continue as at present • Cereals and sugar beet to contract • Forestry may expand depending on level of competing subsidies

  18. Land sales, 1990-1998

  19. Farmers’ managerial experience

  20. Ensuring future agricultural competitiveness • Structural adjustment to favour fewer and larger farms • Technical innovation and research • Improved managerial skills • Tighter links to consumer markets • … is it time to change the terms of the debate?

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