The Rural Economy Research Centre (RERC) is Teagasc’s Economics and Social Science Research Institute. Its mission is to produce high quality social science research and policy advice to improve the competitiveness and sustainability of Irish Agriculture and to enhance the quality of life in rural Ireland. Staff are very active in national and international research networks, participating in a number of EU Framework projects at present. The Centre has very close links with Universities in Ireland, with some staff teaching and supervising graduate students at these institutions. The work of the Centre is published in a variety of ways, e.g. papers at national and international conferences, national reports, papers in refereed scientific journals and via the Centre’s working paper series.

Recent Submissions

  • The impact of flooding disruption on the spatial distribution of commuter's income

    Kilgarriff, Paul; McDermott, Thomas K.J.; Vega, Amaya; Morrissey, Karyn; O'Donoghue, Cathal; Environmental Protection Agency; 2015-CCRP-DS.10 (Taylor & Francis, 11/08/2018)
    Flooding already imposes substantial costs to the economy. Costs are expected to rise in future, both as a result of changing weather patterns due to climate change, but also because of changes in exposure to flood risk resulting from socio-economic trends such as economic growth and urbanisation. Existing cost estimates tend to focus on direct damages, excluding potentially important indirect effects such as disruptions to transport and other essential services. This paper estimates the costs to commuters as a result of travel disruptions caused by a flooding event. Using Galway, Ireland as a case study, the commuting travel times under the status quo and during the period of the floods and estimated additional costs imposed, are simulated for every commuter. Results show those already facing large commuting costs are burdened with extra costs with those in rural areas particularly vulnerable. In areas badly affected, extra costs amount to 39% of earnings (during the period of disruption), while those on lower incomes suffer proportionately greater losses. Commuting is found to have a regressive impact on the income distribution, increasing the Gini coefficient from 0.32 to 0.38.
  • Development of a Strategic Approach for a Single EU Beef Market: An Evaluation of Changes in the EU Intervention system and Labelling Regulations in Relation to Irish Cattle Prices.

    O'Connell, John; Dunne, Liam; Shanahan, Ultan (Teagasc, 01/01/2003)
    The intervention system for beef in the EU has undergone major changes since its inception. These changes were introduced because of changing circumstances in the EU beef market and because of cost factors and inefficiencies associated with and arising from the intervention system itself. While justified from these perspectives it can be said that from the perspective of beef producers the system has changed from being a mechanism which aimed at and operated to achieve a producer Guide Price which in turn was defined as “……..the price which it is hoped to attain on average on the Community market for all the quantities marketed during a given marketing year” (Com 370, July 1976) to one which has abandoned all efforts at achieving a desirable producer price and which provides at best very short term stabilisation of price at its market level. The aim of this paper is to trace the major changes which have occurred to the intervention system and the concomitant price achievement of beef in general in the EU and especially that of Irish beef. These changes together with other market and policy factors occurring on and since 1996 have combined to give a historically poor price performance for Irish beef which despite the growing importance of direct payments is still of major significance in the incomes and welfare of beef producers.
  • The Potential of Farm Partnerships to Facilitate Farm Succession and Inheritance

    Leonard, Brian; Mahon, Marie; Kinsella, Anne; O'Donoghue, Cathal; Farrell, Maura; Curran, Thomas; Hennessy, Thia; Royal Dublin Society; Teagasc Walsh Fellowship Programme (Institute of Agricultural Management, 01/05/2017)
    The rising average age of farmers and low level of young farmer entry is viewed as problematic on a global scale and farm partnerships are presented as a possible means by which farm succession and inheritance could take place in a timely manner. Using the example of Ireland, this research investigates a recent proposal by government to introduce a tax relief as an incentive for farmers to part take in farm partnerships. In this discussion, a hypothetical microsimulation model is used to investigate the possible outcomes of such a tax relief, with scenarios created to examine how this would materialise. It draws on the Teagasc National Farm Survey data which provides Irish data to the Farm Accountancy Data Network in the European Commission. The findings illustrate that even with a tax relief, cattle rearing farms would struggle to reap any economic benefit from entering a farm partnership, while their dairy counterparts would receive more value from tax reliefs. Results also indicate that farm viability will play a large role in whether or not collaborative farming is viewed as an option for farmers.
  • Policy drivers of farm succession and inheritance

    Leonard, Brian; Kinsella, Anne; O'Donoghue, Cathal; Farrell, Maura; Mahon, Marie; Teagasc Walsh Fellowship Programme; Royal Dublin Society (Elsevier, 18/11/2016)
    Farm succession and inheritance is increasingly considered a complex phenomenon which not only affects core dimensions of farm family life but also the agricultural sector more widely. Intergenerational farm transfer in particular is increasingly viewed as fundamental to the sustainability and development of global agriculture. In the majority of EU countries, the average age of farmers is increasing, while the number of farmers under 40 years of age is decreasing. There is growing concern that this demographic trend may have negative impacts on the agricultural industry because it is younger and not older farmers who are associated with more efficient and effective production practices. The question of what motivates decisions to transfer farms is a complex one, and research to date has not apparently enlightened agricultural policy to the extent that current trends towards an ageing farm population are being managed. This research aims to investigate economic and financial aspects of the policy drivers of farm succession and inheritance in Ireland to understand what it is about the policy environment that is failing to stimulate higher levels of farm transfer. It draws on the Teagasc National Farm Survey data which provides Irish data to the Farm Accountancy Data Network in the European Commission. A hypothetical microsimulation model is used to investigate economic factors of farm transfers, with scenarios created to test these factors and their impacts on the transfer process. The Net Present Value (NPV) of income streams for farmers and their successors are calculated to assess which scenarios have the highest/lowest financial effects. The findings illustrate a range of possible scenarios for farm succession/inheritance, with some results indicating that under current policy retaining a farm until death may be more economically beneficial to a farmer than transferring land before death.
  • Cease agricultural activity forever? Underestimating the importance of symbolic capital

    Conway, Shane Francis; McDonagh, John; Farrell, Maura; Kinsella, Anne; National University of Ireland, Galway; Geographical Society of Ireland (Elsevier, 11/02/2016)
    Similar to what is occurring on a global scale, Irish agriculture is populated by an older generation of farmers. Consequently, intergenerational family farm transfer is increasingly viewed as crucial to the survival, continuity and future sustainability of the family farm and agricultural sector. A review of existing research highlights how financial incentives that encourage succession and retirement from farming have stimulated little change in the behavioural intentions and attitudes amongst elderly farmers. Drawing on two previously disparate literature (transferring the family firm and transferring the family farm) and applying Pierre Bourdieu's concept of symbolic capital as a theoretical framework, this paper sets aside financial enticements and presents an insightful, nuanced analysis of the human factors that influence the process of transferring the family farm from the perspective of the senior generation. This research employs a multi-method triangulation design, consisting of self-administered questionnaires in conjunction with complimentary Problem-Centred Interviews, to acquire data on the complex psychodynamic and sociodynamic emotions involved in the process. The prominent themes to emerge from the empirical data are farmer's concerns regarding potential loss of identity, status and control upon transferring management and ownership of the family farm and retiring. Many older farmers appear to prioritise the building and maintenance of their personal accumulation of symbolic capital rather than ceasing agricultural activity. The paper concludes by suggesting that future policies and programmes encouraging family farm transfer must take into account the pervasiveness of symbolic capital and work within this structure to develop effective strategies that addresses the emotional well-being of elderly farmers.
  • The potential role of environmental economics in Teagasc - A scoping exercise 2006

    Hynes, Stephen (Teagasc, 30/11/2006)
    Environmental economics is a new area within the Teagasc vision programme. It is a distinct branch of economics that acknowledges the value of both the environment and economic activity and makes choices based on those values. The goal is to balance the economic activity and the environmental impacts by taking into account all the costs and benefits. The theories are designed to take into account pollution and natural resource depletion, which the current model of market systems fails to do. This (failure) needs to be addressed by correcting prices so they take into account "external" costs. The aim of this project was to look broadly at theses issues in relation to agriculture and natural resource usage in Ireland. In particular it focused on the role that this branch of economics may play in the research agenda of Teagasc in the future. The project was very short in duration (7 months) and was completed on-time (30th November 2006).
  • Phosphorus management on Irish dairy farms post controls introduced under the EU Nitrates Directive

    Buckley, Cathal; Wall, David P.; Moran, Brian; O'Neill, Stephen; Murphy, Paul N. C.; Department of Agriculture, Food and the Marine, Ireland (Elsevier, 08/11/2015)
    The Republic of Ireland was one of a minority of EU member states to include direct controls on chemical phosphorus (P) fertilisers in its EU Nitrates Directive National Action Plan, first introduced in 2006. This study estimates farm gate phosphorus balances and use efficiencies across 150 specialist dairy farms over the seven year period since these controls were introduced (2006–2012) using nationally representative data. Results indicate that P balances declined by 50% over the study period from 11.9 in 2006 to 6.0 kg ha− 1 in 2012. This decline was driven by a reduction in chemical fertiliser imports of 6.5 kg ha− 1. This is equivalent to a reduction of 281 kg of P and represents a cost saving of €812 per annum across the average farm. Phosphorus use efficiency also improved over the period from 60% in 2006 to 78% in 2012, peaking in 2011 at 88.3%. This was achieved while increasing milk solids output per hectare and per cow. Results of a random effects panel data model indicated that P balance and use efficiency are significantly influenced by factors such as fertiliser prices, stocking rates, land use potential, use of milk recording technology, contact with extension services and rainfall patterns.
  • Spatial Modelling for Rural Policy Analysis

    Hynes, Stephen (Teagasc, 01/01/2006)
    The objective of the project was to provide the diverse group of interest groups associated with the agri-food sector (farmers, policy makers etc.) with a microsimulation tool for the analysis of the relationships among regions and localities. This tool would also be able to project the spatial implications of economic development and policy change in rural areas. To this end the SMILE (Simulation Model for the Irish Local Economy) model was developed. SMILE is a static and dynamic spatial microsimulation model designed to analyse the impact of policy change and economic development on rural areas in Ireland. The model developed provides projection for population growth, spatial information on incomes and models farm activity at the electoral division (ED) level.The sub-projects funded under this project were concerned with the simulation, development and enhancement of a spatial econometric model of the Irish rural economy which would compliment the existing econometric models used in Teagasc; focusing on the agriculture and food sectors, previously constructed under the auspices of the FAPRI-Ireland Partnership by staff at Teagasc and NUI Maynooth. That partnership has produced an econometric model of the entire agri-food sector that has been simulated to produce estimates of the impact of policy changes on commodity prices, agricultural sector variables,food industry production, consumption of food both in Ireland and the EU and trade in food products, as well as costs, revenue and income of the agricultural sector. The SMILE model was built to compliment these other econometric models by using an holistic modelling approach that takes into account the spatial difference of rural populations, rural labour force and rural income.
  • Examining the Relative Competitiveness of Irish Agriculture (1996 – 2003/4)

    Thorne, Fiona (Teagasc, 01/01/2007)
    This paper examines the competitiveness of Irish agriculture compared to that of other EU and non-EU countries. The analysis was based on two main data sources – the Farm Accountancy Data Network (FADN) for years 1996-2003 and the International Farm Comparisons Network (IFCN) for 2003 for beef production and for 2004 for milk production. Results showed that the Irish competitive position compared to other EU and non-EU countries was positive when total cash costs were considered indicating a positive outlook for Irish milk production in the short to medium term. However, as the opportunity costs of owned resources are not included in ‘cash cost’ calculations, total economic costs which include imputed charges for owned resources were considered to examine the longer term outlook for the competitiveness of the sector. Using this measure, the competitive ranking for Irish agriculture slipped relative to the other countries. It was found that the main reason for the relatively high economic costs on Irish farms was due to the high imputed land and labour costs. These findings could be considered as a warning signal for the future competitive performance for the average sized Irish farm. However, based on FADN data the competitive position of ‘larger’ Irish dairy farms (in the 50-99 dairy cow size category) did manage to maintain their competitive position within Europe even when total economic costs were considered. Hence, it could be concluded that part of the explanation of the deterioration of competitive ranking for the average Irish dairy farm when total economic costs are considered relates to the relatively low scale of primary agricultural activity in Ireland during this period.
  • Estimation and projection of costs and margins in crop enterprises in the Republic of Ireland

    Thorne, Fiona (Teagasc, 01/01/2007)
    This project reports on the farm level crop economics research conducted in the Rural Economy Research Centre (RERC), Teagasc during the period 2003-2006. The research conducted made current estimates and one year ahead forecasts for margins in each of the major crop enterprises in the Republic of Ireland. The enterprise specific information was based on information from the Teagasc National Farm Survey (NFS), supplemented by projections of price, cost and policy information from a variety of other sources. Yield projections were based on past trends and incorporate estimates of expected variability. In addition, the distribution of profitability amongst the population of crop farms has been examined to gain further insights into the farm level situation and outlook for tillage farms based on the results from the NFS data.
  • An Examination of the contribution of off-farm income to the viability and sustainability of farm households and the productivity of farm businesses

    Behan, Jasmina; Carroll, James; Hennessy, Thia; Keeney, Mary; Newman, Carol; O'Brien, Mark; Thorne, Fiona; Department of Agriculture, Food and the Marine, Ireland (Teagasc, 01/01/2007)
    The number of farm households in Ireland participating in the off-farm labour market has increased significantly in the last decade. According to the National Farm Survey (NFS), the number of farm households where the spouse and/or operator is working off-farm has increased from 37 per cent in 1995 to 58 per cent in 2007. The important contribution of non-farm income to viability of farm households is highlighted in the results of the Agri-Vision 2015 report, which concluded that the number of economically viable farm businesses is in decline and that a significant proportion of farm households are sustainable only because of the presence of off-farm income. Research conducted by Hennessy (2004) demonstrated that approximately 40 percent of farm households have an off-farm income and that almost 30 percent of the farming population are only sustainable because of off-farm income. Clearly, the future viability and sustainability of a large number of farm households depends on the ability of farmers and their spouses’ to secure and retain gainful off-farm employment. The Department of Agriculture, Fisheries and Food (DAFF) have recognised the importance of off-farm income to the sector and they have recommended that future policies focus on farm household viability in all its dimensions, including farm and off-farm income sources (2000).
  • Impact analysis of the CAP reform on main agricultural commodities

    Donnellan, Trevor; Hanrahan, Kevin; European Commission; 150267-2005-FIED-NL (Teagasc, 15/03/2007)
    This study has been carried out for the European Commission's Joint Research Centre to analyze agricultural policies at Member State, EU15 and EU25 levels as well as for Bulgaria and Romania. The modelling tool allows for projections and policy analysis (up to a 10 year horizon) for the enlarged EU.
  • Developing the EU Farm Accountancy Data Network to derive indicators around the sustainable use of nitrogen and phosphorus at farm level.

    Buckley, Cathal; Wall, David P; Moran, Brian; Murphy, Paul N.C.; Department of Agriculture, Food and the Marine, Ireland (Springer, 2015-07)
    This study uses a national farm survey which is part of the European Union (EU) Farm Accountancy Data Network (FADN) to develop environmental sustainability indicators in the use of nitrogen (N) and phosphorus (P) across a range of farm systems in the Republic of Ireland. Farm level micro data were used to calculate all inputs and outputs of N and P that cross the farm gate and to derive balances (kg ha-1) and overall use efficiencies across 827 farms in 2012. The sample is populated weighted to represents 71,480 farms nationally. Results indicated an average N balance of 71.0 kg ha-1 and use efficiency of 36.7% across the nationally representative sample. Nitrogen balances were between two and four times higher across specialist dairy farms compared to livestock rearing and specialist tillage systems. Nitrogen use efficiency was generally lowest across milk producing systems compared to livestock rearing and tillage systems. Phosphorus balance and use efficiency averaged 4.7 kg ha-1 and 79.6% respectively across the sample. Specialist tillage and dairying farms had higher average P balances compared to other livestock based systems. The approach developed in this analysis will form the benchmark for temporal analysis across these indicators for future nutrient balance and efficiency trends and could assist other members of the EU FADN to develop similar nationally representative indicators.
  • Study on the Functioning of Land Markets in the EU Member states under the Influence of Measures applied under the Common Agricultural Policy

    Donnellan, Trevor; Hanrahan, Kevin; Hennessy, Thia (Teagasc, 21/07/2008)
    Study on the Functioning of Land Markets in the EU Member states under the Influence of Measures applied under the Common Agricultural Policy
  • The impact of feed resource costs on the relative competitiveness of beef with other meats

    Dunne, William; Shanahan, Ultan; O’Connell, J.J. (Teagasc, 01/11/2008)
    These reforms represented a major turning point in fundamental structure of EU agricultural policy. This, at the time of implementation, created much uncertainty at both institutional and farm level in relation to future feed resource costs, cattle and beef prices and related market outlooks. However, as this report shows, the reality for Irish cattle farmers was rather different. As a result much of the research effort during the lifespan of the project was diverted to explaining the causes of the unforeseen outcomes together with the implications of policy decisions and related market developments.
  • An Examination of the Implications of Milk Quota Reform on the Viability and Productivity of Dairy Farming in Ireland

    Hennessy, Thia; Shrestha, Shailesh; Shalloo, Laurence; Wallace, Michael; Butler, Anne Marie; Smyth, Paul (Teagasc, 31/12/2008)
    The aim of the project was to produce quality, scientific based policy advice on the most efficient means for the transfer of milk quota between dairy farmers. The main objective of the project was to identify milk quota transfer mechanisms that would ensure the viability of the maximum number of farmers in Ireland while still supporting an internationally competitive agricultural sector. During the course of the project the Irish Department of Agriculture introduced a new milk quota transfer scheme. The milk quota exchange scheme was launched in November 2006. At this stage the objectives of the project were altered to be more policy relevant. Rather than exploring the efficiency of various milk quota transfer models, the aim of the project was redirected to explore the efficiency of the scheme as it was operated in Ireland. The rationale for this change was to provide relevant and timely feedback to policy makers on the operation of the new scheme. While the MTR agreement guaranteed the continuation of the EU milk quota regime until 2014/15, it also made provisions for a review of the milk quota system to be conducted in 2008. Clearly any changes to EU milk quota policy would have implications for farmers in Ireland. A second objective of this project was to explore some policy scenarios that may transpire from the milk quota review and to estimate the implications for farmers in Ireland.
  • WEMAC Project

    Donnellan, Trevor; Hanrahan, Kevin; European Commission (Teagasc, 01/01/2009)
    The WEMAC (World Econometric Model of Agricultural Crops) model is a model which has its origins at the French Research Institute INRA. Over the period 2006 to 2009 INRA, Teagasc and other partners worked on further developing the model as part of an EU Framework Project. This report details some of the project main results.
  • Historical Grassland Turboveg Database Project. 2067 Relevés recorded by Dr Austin O’ Sullivan 1962 – 1982

    Bourke, David; Hochstrasser, Tamara; Nolan, Stephen; Schulte, Rogier P.; National Parks and Wildlife Service (Teagasc, 01/09/2007)
    The more common grassland types occupy about 70% of the Irish landscape (O’Sullivan, 1982), but information on these vegetation types is rare. Generally, Irish grasslands are distinguished based on the intensity of their management (improved or semi-natural grasslands), and the drainage conditions and acidity of the soil (dry or wet, calcareous or acidic grassland types) (Fossitt, 2000). However, little is known about their floristic composition and the changes in floristic composition over time. The current knowledge on grassland vegetation is mostly based on a survey of Irish grasslands by Dr. Austin O’Sullivan completed in the 1960’s and 1970’s (O’Sullivan, 1982). In this survey O’Sullivan identified Irish grassland types in accordance with the classification of continental European grasslands based on the principles of the School of Phytosociology. O’Sullivan distinguished five main grassland types introducing agricultural criteria as well as floristic criteria into grassland classification (O’Sullivan, 1982). In 1978, O’Sullivan made an attempt at mapping Ireland’s vegetation types including the five grassland types distinguished in his later publication as well as two types of peatland vegetation (Figures 1 and 2). This map was completed using 1960’s soils maps (National Soil Survey, Teagasc, Johnstown Castle) and a subsample of the dataset on the composition of Irish grasslands. Phytosociological classification of vegetation is based on the full floristic composition of the vegetation as determined by assessing the abundance and spatial structure of the plant species in a given area. The actual area of the survey (or relevé) is determined according to strict criteria, which include how representative the sample area is for the wider vegetation (i.e. how many of the species found in the wider area are also present in the survey area).
  • Recreational demand modelling for agricultural resources

    Hynes, Stephen (Teagasc, 31/07/2007)
    In the last decade the demand for rural recreation has increased in Ireland as the population has become increasingly urbanised. Increased affluence, mobility and changing values have also brought new demands with respect to landscape, conservation, heritage and recreation, with a greater emphasis on consumption demands for goods and services in rural areas. This project’s contribution to the understanding of outdoor recreational pursuits in Ireland is based on the estimation of the first recreation demand functions for farm commonage walking, small-scale forestry recreation and whitewater kayaking. These are all popular activities that take place in Irish rural space. We use this empirical work to investigate the more general conflict between countryside recreational pursuits and farming activity. Through the estimation of travel cost models, the study derives the mean willingness to pay of the average outdoors enthusiast using small-scale forestry sites in Co. Galway, using farm commonage in Connemara and using the Roughty river for kayaking recreation in Co. Kerry. An estimate of the gross economic value of the sites as recreational resources was also derived. The results indicate the high value of Irish farmland (and the Irish rural countryside in general) from a recreational amenity perspective. The project lasted approximately 2 years and was completed on-time (31st July 2007).
  • Modelling the Effect of Policy Reform on Structural Change in Irish Farming

    Hennessy, Thia (Teagasc, 01/07/2007)
    The Mid Term Review (MTR) of the Common Agricultural Policy (CAP) has allowed for the decoupling of all direct payments from production from 2005 onwards; until then, most direct payments were coupled to production, requiring farmers to produce specific products in order to claim support. After decoupling, farmers will receive a payment regardless of production as long as their farm land is maintained in accordance with good agricultural practices. Direct payments to farmers have been an integral part of the CAP since the 1992 Mac Sharry reforms. Throughout the 1990s, market prices for farm produce have declined generally in line with policy while costs of production have continued to increase. Meanwhile, direct payments increased in value, increasing farmers’ reliance on this source of income. Furthermore, farmers adapted farming practices to maximise their receipt of direct payments, leading to the culture of ‘farming the subsidy’. By 1997, on cattle and tillage farms in Ireland 100 per cent of family farm income was derived from direct payments, meaning that on average the market-based revenue was insufficient to cover total costs.

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