The importance of the agri-food sector to the national economy, but particularly in the border, midlands and west (BMW) region, has been highlighted by a Central Bank publication.

As the Ploughing Championships get under way today, an economic letter by Central Bank economist Thomas Conefrey has been released detailing the progress of Irish agriculture in recent years.

The research found one in 12 people are employed in agri-food nationally, rising to as many as one in eight in BMW region.

Commenting on the research, deputy governor of the Central Bank Sharon Donnery said: “Agriculture makes a significant contribution to the Irish economy. Employing more than one in seven people in some regions, it is clear that the sector plays an important role in many of our rural communities.”

Expansion

Conefrey’s research also detailed the rapid expansion Irish agriculture has experienced, as gross output has risen by 21% in 2010, having remain static from 1995 to 2010.

In 1995, gross output was €5.2bn and this marginally increased to €5.5bn in 2010. This has since risen to €8bn in 2017.

Despite this stronger performance, the research warns of the risks that both Brexit and profitability may have in the near future.

Last year, 40% of agri-food exports went to the UK. This market was of particular importance for cereals (90%) and fruit and vegetables (84%). Dairy (c.35%), beverages (c.21%) and fish (c.10%) are, among others, less exposed.

The beef sector was also found to be vulnerable to both tariff and non-tariff barriers, which could further compound ongoing viability issues. Non-tariff barriers alone could result in a near-10% decline in overall trade between Ireland and the UK.

The importance of diversification to combat the potential impact of Brexit was raised. From 2005, exports destined for non-EU countries rose by 10% to 31% in total.

Debt

Farm debt was examined by Conefrey and he found two-thirds of farms have no business-related debt, but this varied significantly among sectors. On dairy farms, 60% had debt, but this dropped to 30% on cattle farms.

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