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Ciaran Fitzgerald
Agri-food economist

Agriculture is still relevant

Irish agriculture must not be excluded from discussions about balance and trade-offs, writes agri-food economist, Ciaran Fitzgerald

A high-performing Irish economy is fundamental not just to current national wellbeing but also to the affordability of decarbonisation/transition supports. Political consensus requires balance when implementing climate measures so as not to incur unforeseen negative impacts on the Irish economy. Pragmatic assessment of all balancing factors is a fundamental requirement, both in terms of funding economic transitions and getting buy-in on emissions-reduction measures which go against recent consumer trends such as airline travel.

A difficult transition

Ultimately, contraction of the economy, or even recession, will only make acceptance of decarbonisation requirements more difficult if not impossible to implement, as was experienced with the global postponement of emissions-reduction targets and measures in the great recession 2008 to 2016. Given that economic contraction is not desirable for either climate or basic economic welfare reasons, the exclusion of Irish agriculture from balanced debates is clearly unwise, representing, as it does, equal measures of economic ignorance and environmental zealotry.
Complex trade-offs around increasing passenger throughput (and increasing emissions) at Dublin Airport or continuing to support inward investment in data centres (and again increased emissions) are examples of a debate based on addressing balanced considerations.

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The core of the data centre debate seems to be a disagreement over whether Ireland should accept inward investment projects involving data centres – which are heavy energy users – conditional, as per Minister Eamon Ryan, on the data centres showing that they have firstly secured a supply of green/renewable energy. The view from the Minister for Enterprise, Trade and Employment, Simon Coveney, is that that there should be no pre-conditions but that, naturally, a commitment to decarbonised energy sourcing in the short-to-medium future should be expected from new entrants.
The view from Minister Coveney is grounded in the real world where inward investment is recognised as a highly competitive marketplace where opportunities/pipelines are not endless or to be taken for granted. Moreover, foreign direct investment (FDI) of any shade is, was, and always will be, the sacred cow of Irish industrial policy.

No pragmatism for agriculture

This pragmatism is all but denied to the world of the Irish agri-food sector where not only is current output and performance dismissed or ignored but the route to decarbonisation is characterised by a shrill demand for targets to be achieved with undue haste, along with the constant threat of legal action from An Taisce and others if targets or even routes to decarbonisation are not seen as draconian enough by the environmental lobby.

General ignorance around the true economic impact of the Irish agriculture sector, combined with a broad weaponisation of International Panel on Climate Change (IPCC) accounts, continue to ‘inform’ the national conversation.

Farmers and agri-representatives rightly call out the hypocrisy and accounting nonsense that allocates all of our food production emissions to Ireland’s national carbon accounts, even though more than 90 per cent of our dairy and meat is exported. In a completely contrary equation, coal or oil emissions don’t accrue to the countries where production occurs, but instead to the end user. Calling out this contradiction is dismissed as green washing or climate denial.

This weaponisation of the IPCC accounts has been a core part of the rant against Irish agriculture over the last number of years whereby the infamous 35 per cent of total emissions coming from Irish agriculture is constantly and stridently quoted in the small island conversation, while, globally, the broader debate recognises the need to feed a growing population as well as meeting climate challenges. This fact is suppressed or ignored in the Irish context.

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Economic impact on Irish economy

Equally challenging is the absence of any recognition in the public narrative that suppressing Irish agriculture will have a significant negative impact on the Irish economy, which is why the latest version of the annual survey of Irish economy expenditure, published by the Department of Enterprise, Trade and Employment is informative.
This survey presents a detailed summary of economic impact in the Irish economy versus the traditional, official accounting-based GDP/GNP figures which, as is well documented, are distorted by the inclusion of multinational profits and transfer pricing revenues from the multinational sector.

As the graphic above shows, in 2022, industry sales were €465bn, with exports of €419bn, whereas Irish economic expenditure was €73.9bn. This €73.9bn is the true/real measure of Irish economic impact.

The table below from the Department of Enterprise, Trade and Employment’s survey shows that this €73.9bn Irish economy expenditure in 2022 breaks down into €35.9bn spent by indigenous Irish business versus €38bn in spending from the multinational companies.

A more detailed examination of the major contributors to the €73.9bn expenditure total shows that the single biggest spending sector is the agri-food one, which spends €21bn or almost one-third of all Irish industry.

Moreover, analysis of multiplier impacts by the Central Statistics Office (CSO) shows that spending by the food and drink sector on agricultural raw materials and services has a multiplier impact of 2.06 in the rural/regional Irish economy.

Clearly the agri-food sector is a significant source of Irish economic activity and suppressing this activity by regulatory strangulation or legal action, without any consideration of balancing factors or Irish economic impacts will shrink the Irish economy and, perversely, make the delivery of decarbonisation measures even harder to achieve.