Thia Hennessy

Measuring progress in agricultural sustainability to support policy-making

The concept of sustainability is one of the forefront issues in discussions of the challenges facing global agriculture, given the mounting pressure to increase food production in both socially responsible and environmentally friendly ways. From the perspective of Irish agriculture, sustainable intensification is of particular relevance, given ambitious targets to increase milk production in the context of European Union (EU) milk quota removal in 2015. A series of farm-level sustainability indicators are developed here using the Teagasc National Farm Survey FADN (Farm Accountancy Data Network) data for Ireland from 2012. Three dimensions, reflecting the multifaceted nature of sustainability (environmental, economic and social) are considered. Given the environmental challenges inherent in the sustainable intensification of agriculture, it is encouraging to observe that the more intensive, top performing farms (in an economic sense) emit relatively less greenhouse gases when compared to their less intensive counterparts. Conversely, the better performing farms in economic terms tend to have a higher nitrogen surplus per hectare on average. This is consistent with their higher rates of production intensity, but poses a challenge in terms of sustainable intensification and expansion. That said this analysis demonstrates that the nitrogen use efficiency of milk production is positively correlated with economic performance, with more intensive farms producing relatively more milk per kilogram of nitrogen surplus. From the perspective of social sustainability, demographic traits also tend to be positively correlated with economic performance. Given a growing recognition of the need for interconnected policy in the area of sustainability, this research should help inform policy debates and provides a guide for the undertaking of similar assessments elsewhere.

Agriculture, Fisheries and Food in the Irish Economy

Throughout the Celtic Tiger years, the contribution of agriculture to Irish gross domestic product and employment declined as other sectors of the economy boomed. Not surprisingly, interest in the sector over this period, from both the popular media and public representatives, declined. However, since the start of the downturn in Ireland’s economic fortunes in late 2007, there has been a renewed interest in the sector. The Irish government’s Food Harvest 2020 strategy has set ambitious targets for the expansion of the Irish agricultural fisheries and food sector, but the achievement of these targets will be dependent on overcoming a number of structural and environmental constraints. This paper examines the characteristics of this important indigenous sector in the Irish economy and the major constraints facing it. This study concludes with a discussion on whether or not the agriculture, fisheries and food sector is in a position to contribute to Ireland’s economic recovery.

The potential for scale economies in milk powder processing: an Irish case study

This paper examines the difference in costs associated with milk plants of differing dryer scale in Ireland. This is an important question for international competitiveness in the context of the removal of the EU milk quota in 2015 and the expectation that Irish milk production could increase considerably thereafter. Using confidential data obtained from a number of sources, the differential in the cost of processing at differing plant scales was established. It was found that two 7.5xa0tonne/h dryers at a single location provide a level flexibility which offsets the slight cost advantage associated with a 15 tonne/h dryer.

Hidden Underemployment Among Irish Farm Holders 1996-2011

This paper examines the factors driving hidden underemployment on Irish farms during the course of the economic boom in Ireland and the subsequent economic decline post 2008. This measure of hidden underemployment is due to differences between the farmer‟s reported amount of labour and the standard labour requirement estimated in the Teagasc National Farm Survey. Hidden underemployment can be attributed to a number of factors relating to inadequate employment situations as described at the 16th International Conference of Labour Statisticians (16th ICLS) such as low productivity, casual work practices and the poor utilisation of skills and other factors specific to agriculture and/or self employment. We place particular attention upon the potential role of off-farm labour supply in solving the underemployment problem. We use a two-stage residual inclusion model and a random effects probit model to examine the forces behind farm underemployment. This paper provides an interesting set of results given that the end of the economic boom phase co-incided closely but not precisely with the decoupling of farm-level subsidies in 2006.

Farm income variability and off-farm employment in Ireland

Purpose - The purpose of this paper is to identify the potential relationship between farm income variability and off-farm employment decisions in the short and medium term for the case of Irish farm operators. Design/methodology/approach - Panel probit models of off-farm labour supply are estimated using Teagasc National Farm Survey data for Irish farms. The framework is based largely on standard expected utility but includes a constraint for recent employment history. Findings - The analyses identifies some evidence of a positive association between farm income variability and off-farm employment in the medium term but no significant relationship in the short term. This suggests that off-farm employment is part of a wider portfolio decision but is not a strong solution to short-term farm income shocks. Practical implications - European farmers increasingly face high income variability but financial risk management tools are not sufficiently developed or widely accessible to assist farmers in managing the associated risk. This deficiency can have negative implications for household economic welfare and future farm investments and hence the future farm income. Off-farm employment can form part of a wider medium-term portfolio strategy but more effective tools are also required for risk management particularly in dealing with short-term volatility and where off-farm employment is not a realistic endeavour given time constraints and/or demographics. Originality/value - The estimation of farm income variability includes a detrending method thus reducing the likelihood of overestimating farm income variability for farms in deliberate expansion or decline. While previous research has typically focused on the short-term response of farmers to historical farm income variability, this research has distinguished between the short and medium term.