Farming has historically been the primary industry in this country. As a profession it is under considerable pressure because it is no longer a profitable enterprise for the majority of farmers. Low prices for produce and increased operating costs coupled with the small size of the individual farm units have reduced the commercial viability of the farming industry. In some ways EU regulation is a barrier to development of the industry, although overall, it is true that without the EU it would be in even further economic trouble.
If farming was a mainstream business or industry the plug would have been pulled on most individual farms and probably on the industry as a whole a long time ago. Any other business having similar financial fundamentals would be closed immediately. Such is the way for a business that is not economically viable. The reality is that farming in Ireland is no longer viable, so for it to survive or thrive it must change the way that it does its business. It must be come more businesslike and market focused.
It is not a good business to be in because foreign competitors can produce at a much lower cost in some cases at a similar quality. As a business advisor I work with businesses on a regular basis to help them find a competitive advantage in their particular marketplace. Such work always commences with an examination of the operating environment of the business.
In agriculture’s case it is clear to see that Irish produce has lost its competitive advantage as its price position is uncompetitive and its quality can in many cases be replicated at this lower cost. As regards price Irish agriculture is at a severe disadvantage, so we are no longer competitive and may never be again. There is a solution to this problem. A strategy that will ensure the long term profitability of the entire industry but it will require a change of mindset of all stakeholders in the industry.
The industry urgently needs to find added value and develop competitive advantages not related to price. As a nation we could become a premium brand that can command a premium price. Therein lies the challenge for the agricultural industry in Ireland.
One way to reposition the industry at the top of the international agricultural food chain and ensure that our produce enjoys a strong consistent demand at a premium price would be to become an organic farming nation. We would be the only one on the planet. This would make us unique, marketable, and able to enjoy a price positioning at the elite end of the food chain. Our competitive advantage could become our national commitment to environmental standards and organic produce.
Granted it would be a difficult project to implement and to police but not impossible. It would require the commitment of all stakeholders and vigorous policing with stringent penalties for the breach of the new agricultural protocols. The benefits to the farming industry, tourism, and the country are potentially huge. It would redefine our international image and reputation and would have associated benefits for tourism and many other industries.
Being at the top of the food value chain would overcome the current problem of our produce fetching discount prices, hence ensuring that agriculture in Ireland is no longer a viable proposition. It would also enable us to avoid EU competition directives or quotas, as we would not realistically have comparable competition.
Agriculture is both a mainstream domestic industry and a export-oriented business. The farming community realise this better than anyone. The Government however seem to approach it more as a collection of cottage industries that should be indulged rather than developed and exploited. This does a grave disservice to an important industry and one of the nation’s greatest potential assets.
We hear much rhetoric about the smart economy from people who are not all that smart themselves. To develop a smart economy we need to develop smart business operating in a smart environment facilitated by Government. We need to stimulate innovative practices across all industries and sectors. We need to think smart because a smart economy needs people capable of smart thinking. You cannot build a smart economy without smart people at the helm. That is our limitation.
