When it comes to reeling in the years, 2020-2021 will need a series of its own.
Dealing with a global pandemic has brought unimaginable financial and human cost, yet the farmers, factories and shop workers found a way to keep food supplies flowing and scarcity was avoided.
Many in the hospitality sector have had their businesses ruined while food retail prospered.
In this report, we analyse both experiences and marvel at the ingenuity of the hospitality sector to develop takeaway and home delivery in order to limit the commercial damage from the pandemic.
Another lesson from COVID-19 is that high-speed broadband is now as essential in rural Ireland as electricity.
Where it exists, people with desk jobs have been able to work remotely and consumers have been able to continue shopping, albeit in a different way.
The surge in parcel deliveries has been made more straightforward by the availability of Eircodes, which eliminate the need for the skill of giving and understanding directions which were so much part of the fabric of rural life.
Of course, online shopping was already growing but the pandemic fast-forwarded the process by several years.
It is the same with the use of cash and traditional-style banking.
As shopping migrated to online and card payment rather than cash was encouraged for purchases, the main banks increased the pace of removing their physical presence through closing branches.
COVID-19 in itself didn’t cause these developments but its presence, and lifestyle changes caused by lockdown, made the physical presence of banks less important.
The business of farming has also been transformed by technology and, again, this was happening but was speeded up by lockdown.
Farmers have been required to engage with the Department of Agriculture online for calf registration and scheme applications. The lockdown has introduced the concept of online farm inspections but perhaps the biggest change of all has been the move to online buying and selling of cattle.
The local mart is primarily a place for farmers to convert their livestock to cash.
However, it is also a social outlet for many isolated people with limited social opportunities.
There is a great convenience in being able to bid for cattle through an app on the phone from a kitchen table
Lockdown stopped marts operating in their traditional way but while the social opportunity was lost, the business was able to move online.
Online trading has been embraced by farmers and has a particular attraction for livestock farmers, many of whom are working part-time off farm during the day.
There is a great convenience in being able to bid for cattle through an app on the phone from a kitchen table.
It also reinforces the need for good broadband or 4G mobile phone signal.
Such has been the success of online selling that many livestock farmers want the facility to remain when traditional mart sales resume.
Prior to the arrival of COVID-19 and the lockdown just before St Patrick’s Day last year, Brexit was the biggest issue facing Irish agriculture.
The fact that it existed alongside the pandemic throughout 2020 made it no less an issue and the arrival of a very basic deal that avoided tariffs and quotas on Christmas Eve was greeted with relief that it could have been worse.
Ireland is the EU country most affected by Brexit and the consequences of a no deal would have left Ireland with the largest tariff burden in the EU 27, despite having just 5% of EU 27 trade with the UK. This is because if it came to trading under WTO terms and tariffs, agriculture – particularly beef – has the largest tariffs.
In fact, if Irish agriculture was a country, then it would have had the second largest tariff burden in the EU, just behind Germany.
While the deal avoided that, there remains the cost and inconvenience that non-tariff barriers will bring to Irish exports entering Britain.
These haven’t been experienced yet because the UK government have deferred the introduction of full border controls until January 2022.
However, it is evident from the problems exporters from Britain to the EU are having with goods of animal and plant origin that it adds cost and disrupts service to the point that for small consignments it makes doing business too costly to be viable.
Nowhere is this more evident than in the implementation of the protocol designed to allow Northern Ireland (NI) to continue trading in the EU single market. This means that EU border controls have to be applied at NI ports on goods entering from Britain.
Suddenly, on 1 January, a 1kg online purchase of a speciality cheese or meat required the same veterinary certification and inspection process as a 20t container.
While it is commercially viable to do this for a 20t container, it simply isn’t commercially viable or practical to do it for a 1kg consumer purchase.
Full implementation of controls has been deferred until 1 October 2021 but the problems are extensive.
Big business can adapt to some extent but, even then, the major supermarkets such as Asda and Sainsbury’s which are serviced from distribution centres in Britain will find it simply not viable to supply many products of plant and animal origin.
The problem, as revealed by the Trevor Lockhart interview on pages 37 and 38, is that trade rules aren’t designed for the normal trade of goods in an internal market such as the UK nor do they reflect the current state of technology to replace an historic paper-based system.
For the NI protocol to function as intended, there is a need for a risk-based and proportionate set of controls which protect the EU single market but allow business to continue. There is no off-the-shelf solution to this – a bespoke arrangement is required.
The other major threat to Irish agriculture from Brexit is UK trade policy outside the EU.
It is in the process of concluding trade agreements with Australia and New Zealand, both major exporters of beef and sheepmeat, plus dairy in the case of New Zealand.
A UK deal will mean enhanced access for these to the UK market, creating additional competition for Irish exports.
Also, it will not just be in the UK marketplace that this impact is felt for Irish exporters, it will have a knock-on effect in EU 27 markets as well.
This is because the EU-UK Trade and Cooperation agreement that allows tariff and quota-free trade both ways means that the UK can continue to export its beef and sheepmeat to EU markets, while imports to the UK satisfy the needs of domestic consumers.
A UK deal will mean enhanced access for these to the UK market, creating additional competition for Irish exports
Therefore, if UK producers are finding their market oversupplied with imported product which in the case of New Zealand sheepmeat this spring is half the price of UK or Irish, then the EU market risks being oversupplied with UK sheepmeat, creating a downward pressure on price.
This, combined with the cost and disruption of non-tariff barriers, means the full consequences of Brexit have yet to be felt by Irish agriculture.
The fifth agriculture strategy is currently out to consultation, closing on 15 June.
This strategy is less about productive agriculture and is focused primarily on protection of the environment and meeting stringent GHG emissions targets.
This is the framework in which Irish agriculture will operate for the remainder of this decade and beyond.
The strategy defines what is required by way of emissions reductions. Put bluntly, a reduction in emissions of 10% has to be made by 2030, however it is achieved.
It is estimated that 60,000 Irish farmers would benefit from increasing area-based payments, 55,000 would lose out, while 16,000 would remain the same
The adoption of Ag Climatise as the roadmap for environmental performance brings a level of certainty on how to achieve the ambitions but it is less clear on how the cost to farmers will be offset. This is against a background where food is expected to cost no more in 2030 than at present.
There is no doubt that with the implementation of the targets set, Irish agriculture is likely to be the most sustainable in the world.
While the strategy believes that this can be commercialised and give Irish produce a competitive advantage in the marketplace, it requires a leap of faith to believe that the market will pay for this when food is projected by UN FAO to cost the same or less.
Of course, the strategy was published in draft and there is an opportunity for everyone now to have an input.
It is also clear that with the change of president in the US, there is a renewed global focus on climate change and the measures that need to be taken urgently.
Perhaps Irish and EU agriculture will then not be alone in facing a new world where output is reduced. If output is reduced globally, then as the USDA impact assessment on Farm to Fork reveals, the value of agricultural produce will increase significantly.
This will bring a separate problem to the fore and that is the issue of food security.
The USDA estimates that if the entire world of agriculture adopted the EU Farm to Fork model food prices would increase by 89% and a further 185m people, predominantly in Africa and Asia, will be exposed to food insecurity.
That means that for the market to deliver meaningful price increases, the supply of product has to be restricted everywhere.
If it happens on a global basis, it gives farm incomes a projected 15% boost but the knock-on effect is exposing the poorer people of the world to increased food insecurity.
If there isn’t a market-led increase in farm incomes then farmers are exposed to carrying the cost of the 2030 strategy for agriculture. In this scenario, and bearing in mind the acknowledgment by the strategy of the need for viable farm incomes, the Government must be prepared to step in as underwriter.
We are fortunate in this year’s report to have secured a range of interviews with people willing to tell their story on how they are coping with COVID-19 and Brexit.
The issue of climate is omnipresent and will remain so. It is fascinating to also see how a business such as Bord na Móna has evolved from being a peat-based energy producer to a more sustainable model.
The Common Agriculture Policy (CAP) is the main vehicle for delivery of EU funding to agriculture across the EU. It was the first common EU policy in 1962 and its purpose was to ensure supplies of affordable food for EU citizens.
This objective has long since been achieved and in its latest format, expected to be signed off in the coming weeks, it will pivot from production support to supporting environmental management and GHG reduction.
National governments will present detailed plans to the EU on how they will deliver this and the agri-food strategy 2030 will be at the core of the Irish application.
The big change that Irish farmers will notice is that 25% of their current direct payment will have to be earned by delivery of environmental measures.
The current average direct payment to Irish farmers is approximately €9,000 and there is concern that many may forsake 25% of their payment instead of pursuing environmental projects.
If there isn’t a market-led increase in farm incomes. farmers are exposed to carrying the cost of the 2030 strategy
The other big controversial issue with Irish farmers is the movement of payments from historic production-based entitlements to an area- or land-based payment.
During the present CAP, all entitlements reached 60% of the national average, a rate of €150/ha.
The European Parliament wants this to move to 100%, achieving full flattening at €260/ha.
The current thinking is that it is more likely to settle at 85% or €220/ha.
This is controversial because it creates winners and losers.
Small, intensive farms with large payments carried forward from the time when CAP payments were production-based will lose out to farmers with large areas of land irrespective of its production capability.
It is estimated that 60,000 Irish farmers would benefit from increasing area-based payments, 55,000 would lose out, while 16,000 would remain the same.
The CAP is likely to be approved in the coming weeks and changes will take effect from January 2023.