This year’s Agribusiness report considers the contribution of rural agribusinesses towards overall economic output.

We selected five rural towns across the island for our analysis, to explore how agriculture contributes to economic output and employment. To fully capture the economic linkages of rural communities, our analysis relates to economic activity within a 30km radius of each town.

The five towns were selected to cover a balanced mix of agri sub-sectors, and reflects the diversity in Ireland’s agri-food sector. The majority of farms in Ballyhanuis rear either beef or sheep. Cavan has a mix of pig, poultry and beef farms. Charleville covers dairy, pig and tillage farming. Cookstown has a strong footprint across pig and poultry farming. Enniscorthy has a large tillage sector, followed by sheep farming.

Our analysis followed a two-pronged approach. First, we used our in-house economic impact assessment model to estimate each town’s contribution to the national level economic output and employment. Second, we conducted a survey of farmers and businesses located within a 30km radius of each town. The survey results highlights both the sector’s challenges and its opportunities for policy support. In addition, we considered industry data from various organisations, including the Central Statistics Office (CSO), Department of Agriculture Food and the Marine (DAFM), Teagasc, Bord Bia, Department of Agriculture, Environment and Rural Affairs (DAERA) and the Northern Ireland Statistics and Research Agency (NISRA).

Broadly, economic impacts arise when the agriculture sector buys inputs that are produced in other sectors in the economy.

The purchase of agricultural inputs creates a flow of expenditure and a multiplier impact across the economy. Higher demand for agricultural output requires producers (the sector) to increase their purchases of goods and services from their suppliers to produce the product in question.

In turn, suppliers of agricultural inputs increase their purchases of the goods and services they need to produce the products they supply to the agricultural sector. This creates additional rounds of expenditure in the value chain, also referred to as the multiplier impact, that lead to increased output and employment. Our economic multipliers incorporate the following components:

1 Direct impacts, for example impacts directly accruing from expenditure by farmers in the sector (eg purchase of farming inputs).

2 Indirect impacts, for example impacts generated from expenditure by businesses within the sector’s supply chain.

3 Induced impacts, for example impacts generated from the spend of individuals and businesses outside the sector as a result of increased incomes (eg, additional household expenditure as a result of increased incomes).

Economic impact

Our impact assessment estimates the local and national level economic impact of the agri-food value chain in terms of gross economic output and employment for each sub-sector (beef, dairy, sheep, poultry, pig, tillage) and using pro-forma values and specific assumptions.

We use each town’s hectares of tillage planted and stock numbers for animal production as an indication of their relative share in national level economic activity.

Considering agriculture’s national level economic impact, and taking a 30km catchment area for each town, we assumed that each town’s contribution is approximately proportional to the share in hectares of tillage planted and stock numbers.

Based on national level economic activity, the agri-food value chain (primary and processing) contributed ~€21.123bn to national (ROI) gross economic output (2021).

Similarly, the agri-food value chain (primary and processing) contributed ~£9.0bn to national (NI) gross economic output (2021).

Considering the national level employment multiplier impact in ROI, expenditure in the primary agriculture sector supports approximately 178,600 jobs. Based on the national level employment multiplier impact in NI, primary agriculture supports approximately 52,900 jobs.

Considering the primary and processing components of agriculture within a 30km radius of each town, the four towns generate a combined ~€4.947bn for the Republic of Ireland’s (ROI’s) national economic output. Similarly, Cookstown contributes ~£1.634bn to Northern Ireland (NI’s) national economic output.

In terms of national level employment, a combined ~41,388 jobs are linked to activities in the agri-food sector in Ballyhaunis, Cavan, Charleville and Enniscorthy. Similarly, for national level employment, the sector in Cookstown supports ~10,040 jobs.

While the analysis highlights the towns’ relative contribution to overall economic output, the survey undertaken in parallel adds context and colour. Respondents highlighted several key challenges for the sector, including rising input costs, adapting to climate change, stagnant product prices as well as sourcing costs and retaining labour. Feedback from respondents suggests that supports in the form of CAP support, capital grants and tax reliefs could help the sector to mitigate these challenges.

Taken together, it is clear that agriculture has a strong footprint across the five towns analysed. There is a strong inter-relationship between rural areas and communities and the sector’s local value chains, economic output and employment.

As the leading professional services firm on the island of Ireland, KPMG supports multiple public sector and private sector players across the agri-food sector through Audit, Tax, Deal Advisory and Consulting services. We are committed to supporting the sustainability and growth of the sector through the provision of unrivalled economic and strategic advice.

KPMG strategy

The KPMG Strategy team worked closely with the Irish Farmers Journal to design, conduct and deliver this year’s report. KPMG’s Strategy practice is Ireland’s #1 strategy house, with unrivalled international experience and sector depth in the Irish market, north and south. Our multidisciplinary team combines experience across growth and decarbonisation strategies, operations and supply chain benchmarking, commercial due diligence and economic impact assessments. We have worked with Tirlán, Carbery, Lakeland, Kerry, Bord Bia, Dairy Council for Northern Ireland, and the Department of Agriculture, Food and the Marine, among others