Ireland’s farm organisations have been fighting on two fronts. The perception has been created that living standards have been eroded by inflation, especially inflation in food prices, and that national targets for carbon reduction are threatened by very large emissions from agriculture. These beliefs could become triggers for policy changes given the unsympathetic treatment from national media. Both of these narratives need to be challenged.

The general inflation rate has already fallen and is back within touching distance of the long-term target of 2%, which remains the formal anchor for the European Central Bank and was reinforced in last week’s interest rate decision in Frankfurt.

The worst of the inflation surge in Ireland is over and food prices have only recently been a big component anyway – the Central Statistics Office (CSO) is very careful about the collection and dissemination of the monthly figures for the Consumer Price Index and its estimates of price inflation are not plucked out of thin air.

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It refreshes the weights attaching to each item of household spending regularly through nationwide household budget surveys and other statistical sources.

On recent readings, the share of the item called food and non-alcoholic beverages in household budgets has been around 10%. It fluctuates over time and the long-term trend has been downwards – in 1980, it was 28%.

The decline reflects rising living standards and the popularity of items which were seen as luxuries in earlier generations. Passenger numbers at Irish airports are currently around 10 times the figure in the early 1980s.

Since the budget shares of the various goods and services are known and updated regularly, statisticians are able to calculate the contributions of each of the 12 main groups (food, energy, restaurants and hotels, housing and the rest) to the overall change in the price index.

If one item with a high weight soars in price over a period of, say a year, while the others change only a little, the contribution will be large. The CSO reckons that the portion of the overall inflation rate that can be attributed to food items has indeed been higher in the last four years or so, but between late 2013 and the middle of 2021, the contribution was consistently negative – overall inflation was moderated because food price rises were below the average.

In the years before 2013, the picture was rather mixed, with generally small contributions from food prices, including some negative contributions. Irish food production is largely for export and there have been periods of rising and of falling world prices, inevitably reflected in Ireland.

A high proportion of food sales at retail is also met from imports, and reflect world prices. The period of strong prices may be sustained but there are signs of weakness beginning to emerge in both beef and dairy. Food price volatility is not new and the attribution of the recent price strength to evil and malevolent forces, be they farmers, processors or grocery stores, is careless populism.

There are serious problems too with the narrative that agriculture is responsible for an exceptionally large portion of Ireland’s carbon emissions, usually put at 35% or even higher.

Emissions for certain sectors are measured on a production basis, so countries with high net exports from the farm sector, especially dairying, will appear to be ‘causing’ high emissions. It would make as much sense to attribute Ireland’s car transport emissions to Saudi Arabia.

Fossil fuels are consumed in high volumes in Ireland, but are produced in the lowest-cost locations in the Middle East, Russia and elsewhere, in fortunate countries.

The desert kingdom is lucky enough to play host, due to accidents of geology, to reserves of oil and gas which are low-cost to discover and to produce. The same is true of the grass belt in northwestern Europe, of which the more southerly regions of Ireland are a significant part.

International trade naturally chooses lower cost locations for production, which is all the explanation required for Irish agriculture’s apparently high emissions. This is how international trade is supposed to work. Restraining dairy output in Ireland makes as much sense as diverting oil production in Saudi to more costly locations on which geology did not smile, the equivalent of vineyards in Donegal.

There is of course a case for imposing costs on consumers of products and services which entail high emissions but this is effectively achieved in European countries where, for example, automotive fuels are taxed heavily.

But it is not done at all in Trump’s America, where auto fuel at the pump is about half the European retail price and the price, around 80 cents per litre, is strangely a political issue.

The constant complaint about high sectoral emissions from Irish farming reflects defective metrics for measuring emissions, rather than economic reality.