• Assessing the Geographic Representativity of Farm Accountancy Data

      green, stuart; O'Donoghue, Cathal (MDPI AG., Basel, Switzerland, 06/02/2013)
      The environment affects agriculture, via soils, weather, etc. and agriculture affects the environment locally at farm level and via its impact on climate change. Locating agriculture within its spatial environment is thus important for farmers and policy makers. Within the EU countries collect detailed farm data to understand the technical and financial performance of farms; the Farm Accountancy Data Network. However, knowledge of the spatial-environmental context of these farms is reported at gross scale. In this paper, Irish farm accounting data is geo-referenced using address matching to a national address database. An analysis of the geographic distribution of the survey farms, illustrated through a novel 2D ranked pair plot of the coordinates, compared to the national distribution of farms shows a trend in the location of survey farms that leads to a statistical difference in the climatic variables associated with the farm. The farms in the survey have significantly higher accumulated solar radiation values than the national average. As a result, the survey may not be representative spatially of the pattern of environment x farm system. This could have important considerations when using FADN data in modelling climate change impacts on agri-economic performance.
    • Does the single farm payment affect farmers’ behaviour? A macro and micro analysis

      Howley, Peter; Breen, J.; O'Donoghue, Cathal; Hennessy, Thia; European Commission; QLK5-CT-2000-00473; SSPE-CT-2005-021543 (Institute of Agricultural Management, 2012-10)
      Using Ireland as a case study, the overall aim of this paper is to determine if decoupled payments affect farmers’ behaviour. Using a dynamic, multi product, partial equilibrium model of the EU agricultural sector, this paper first compares levels of production that would be expected if decoupled payments had no impact on farmers’ activity with actual observed outcomes. Second this paper compares cereal and cattle farmers’ profitability prior to decoupling with that observed after the introduction of decoupled payments. The analysis presented here would suggest that decoupled payments do still maintain a significant effect on agricultural activity with farmers using this new form of support to partly subsidise unprofitable farm production.
    • The employment effects of Food Harvest 2020 in Ireland

      Miller, Ana Corina; Matthews, Alan; Donnellan, Trevor; O'Donoghue, Cathal (Teagasc (Agriculture and Food Development Authority), Ireland, 2014)
      This paper examines the job creation potential of the four main sectoral growth targets in the Food Harvest 2020 (FH2020) development plan for Irish agriculture, namely the growth targets for milk, beef, sheep and pigs. As well as the direct employment that would be created from an increase in activity in the agriculture sector, there would be a knock-on benefit for the rest of the economy arising out of the linkages between agriculture and other economic sectors, as well as the spending of those additionally employed on goods and services produced in the economy. Commonly this is described as the multiplier impact. Two scenarios are simulated using different assumptions to assess how employment will respond to increased output. The first scenario shows the effects of the four shocks calculated using average or direct employment coefficients. The second scenario calculates the effects using marginal employment coefficients estimated using an econometric model of the output-employment relationship. Our results are sensitive to the choice of coefficients used to simulate the employment potential of the FH2020 targets. Based on our preferred scenario using marginal employment coefficients, we estimate that achieving the FH2020 targets will create at least an additional 16,500 jobs in the Irish economy.
    • Explaining the non-economic behaviour of farm foresters: The effect of productivist and lifestyle motivations

      Howley, Peter; Hynes, Stephen; O'Donoghue, Cathal (Teagasc, Oak Park, Carlow, Ireland, 2012)
      Currently rates of planting lag far behind levels that would be expected from a comparison of the returns from farm forestry with competing agricultural alternatives. Previous research has focused on the role of economic factors such as government subsidies, returns from competing agricultural alternatives and structural farm factors in explaining the decision to afforest. By examining the role of farming attitudes and motivations, the aim of this paper is to provide a framework for better understanding farmers’ behaviour in relation to the decision to enter into forestry. The results provide rare quantitative evidence that strong lifestyle and productivist motivations significantly affect farmers’ behaviour. Environmental values and perceptions regarding the extent to which forestry is seen as a component of a natural landscape were two further factors found to affect the probability of participation. We conclude that the design of policies aimed at encouraging changes in farm activities ought to be guided by a better understanding of the motivations and attitudes of farm operators.
    • The Geographical Spread and the Economic Impact of Food Harvest 2020 – A Regional Perspective.

      Carey, Mary; O'Donoghue, Cathal (Teagasc, Oak Park, Carlow, Ireland, 2013)
      Recently the agri-food sector has received increased attention in Ireland. The agri-food sector has been the traditional backbone of Irish exports, and despite the economic downturn Irish exports in this sector grew by an impressive 12 percent in 2011 (CSO 2012). The agri-food sector is regarded as Ireland’s largest indigenous industry, the potential of the sector in terms of exports, and its heavy dependence on domestic inputs are the key reasons for the increased attention. The real economic value of the agri-food sector in Ireland is analysed at national, and most importantly for this paper, at regional level. This paper examines the impact of the agri-food sector in addressing regional disparities in Ireland. The estimation of the true value of the agri-food sector is evaluated at regional level by analysing Gross Value Added, employment levels and productivity rates for the sector expressed in percentage of regional values. Gross-Value-Added in absolute terms and as a percentage of regional Gross-Value- Added provides us with a more thorough understanding of the regional importance of certain industries within the sector. In terms of employment, the rural context of the agri-food sector is discussed, including the geographical spread of the sector. A comparison of regional productivity levels is analysed at national and regional level. In addition, this paper geographically distributes the change in output and employment if the four main sector specific Food Harvest 2020 targets are achieved. As a preliminary contour of the agri-food sector in Ireland this research will be useful to all the key players in the sector.
    • 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.
    • Modelling the Gross Cost of Transporting Pig Slurry to Tillage Spread Lands in a Post Transition Arrangement within the Nitrates Directive.

      Fealy, Reamonn; O'Donoghue, Cathal; Hanrahan, Kevin; Martin, Michael; Schulte, Rogier P. (Teagasc, Oak Park, Carlow, Ireland, 2012)
      The context of this paper is in the phasing out of the transitional arrangement under the Nitrates Directive. As there is relatively little grassland capable of taking significant amounts of pig slurry available in the vicinity of the main pig production areas, in this paper we attempt to quantify the cost of transporting this slurry to the nearest available tillage land. The approach taken was to examine the geographic structure underlying the pig sector in Ireland using Geographic Information Systems (GIS) technology. The study highlighted the differential cost with, amounting to 10% of gross margin on average and as high in major pig producing areas as 21.5% in Longford and 16.6% in Cavan, while lower at 7-9% in South Tipperary and Cork. Thus while the problem is significant, the impact is not constant across the country, highlighting the value of a spatial analytical approach. Future work should assess the existing cost of spreading manure in order to be able to ascertain the net cost of spreading on tillage lands. The robustness of the results also need to be tested to assess the implications of changes in the prices of fossil fuels and fertilisers, both in terms of the cost function and in terms of the cost of substitutable mineral fertiliser
    • Modelling the Marginal Abatement Cost of Mitigating Nitrogen Loss from Agricultural Land

      Chyzheuskaya, Aksana; O'Donoghue, Cathal; Buckley, Cathal; Ryan, Mary; green, stuart; Gibson, Mark (Teagasc, Oak Park, Carlow, Ireland, 2012)
      With the deadline identified by the Water Framework Directive (2000/60/EC) approaching in 2015 there is increasing pressure on policymakers to introduce new regulations to achieve water quality targets. Agriculture is one of the contributors of diffuse pollution entering watercourses and will come under pressure to reduce pollutant loads. This paper produces Marginal Abatement Cost (MAC) Curves for eight policy measures that could potentially reduce nitrate leaching from agricultural land on Irish dairy farms. These include: 1) reduction of fertiliser application by 10%; 2) reduction of fertiliser application by 20%; 3) livestock unit reduction to limit organic N to 170 kg ha-1; 4) reduction of livestock units by 20%; 5) change of feed mix to reduce cow dietary N intake; 6) fencing off watercourses to introduce a buffer zone; 7) improved dairy cow genetic merit by introducing higher performing dairy breeds; 8) more efficient slurry application. Results from this study indicate that there will be reductions in farm gross margins across nearly all policy measures. However, MAC and the ranking of MAC vary across individual farms and aggregate MAC does not reflect the heterogeneity of impacts across individual farms. This paper shows that any measure introduced in a “one size fits all command-control” fashion will not yield efficient economic results.
    • The physical, economic and policy drivers of land conversion to forestry in Ireland

      Upton, Vincent; O'Donoghue, Cathal; Ryan, Mary; Department of Agriculture, Food and the Marine, Ireland (Elsevier, 27/11/2013)
      Land use change is fundamentally a product of the interaction of physical land characteristics, economic considerations and agricultural and environmental policies. Researchers are increasingly combining physical and socio-economic spatial data to investigate the drivers of land-use change in relation to policy and economic developments. Focusing on Ireland, this study develops a panel data set of annual afforestation over 2811 small-area boundaries between 1993 and 2007 from vector and raster data sources. Soil type and other physical characteristics are combined with the net returns of converting agricultural land to forestry, based on the micro-simulation of individual farm incomes, to investigate land conversion. A spatial econometric approach is adopted to model the data and a range of physical, economic and policy factors are identified as having a significant effect on afforestation rates. In addition to the financial returns, the availability and quality of land and the implementation of environmental protection policies are identified as important factors in land conversion. The implications of these factors for the goal of forest expansion are discussed in relation to conflicting current and future land use policies.
    • Policy and Economic Change in the Agri-Food Sector in Ireland

      O'Donoghue, Cathal; Hennessy, Thia (The Economic and Social Review, 2015-06-22)
      In the agri-food sector, recent policy reforms such as the milk quota abolition and CAP reform as well as robust export growth have increased the sector’s visibility in public debate. In this paper we assess the economic characteristics of the sector and consider prospects for expansion. We also assess challenges to expansion, including land access, elderly age profile, the uptake of technologies, the financial strength of this sector, increasing price volatility and environmental constraints. The paper also highlights income challenges in terms of low viability rates that affect particularly the drystock sectors and the severe impact that the economic downturn has had on off-farm income. Also as the sector is highly influenced by policy, both in terms of regulation and in terms of impact of agricultural subsidies on total income levels, we consider the impact of recent CAP reforms.
    • 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.
    • The Potential Economic Returns of Converting Agricultural Land to Forestry: An Analysis of System and Soil Effects from 1995 to 2009

      Upton, Vincent; Ryan, Mary; Farrelly, Niall; O'Donoghue, Cathal; Department of Agriculture, Food and the Marine, Ireland (Society of Irish Foresters, 05/07/2013)
      Private land owners have been responsible for the majority of annual afforestation in Ireland since the mid1990s, but planting rates have generally been declining since 2002. Although the decision to plant may be driven by a number of factors, the profitability of forestry as a landuse option should be an important driver and offer some insight into trends in afforestation rates. As farmers undertake most afforestation in Ireland it is important to account for the opportunity cost of lost agricultural income when analysing the financial outcome of planting. In addition, soil quality plays an essential role in dictating the productivity and profitability of both agriculture and forestry. This study examines the effects of soil quality and superseded agricultural system on the potential profitability of afforestation by farmers between 1995 and 2009. Data from the National Farm Survey were employed to identify the annual gross margins for six agricultural systems on six soil types that differ in terms of quality. The measures of soil quality were translated into potential yield classes for forestry using an existing productivity model and Teagasc’s Forest Investment and Valuation Estimator was employed to calculate the net present value of afforestation for each of the systems and soil types. The results demonstrate how the competitiveness of forestry as a landuse option is influenced by soil quality and superseded enterprise and how forestry has become more competitive with agricultural enterprises over the period of analysis.
    • The Potential of Farm Partnerships to Facilitate Farm Succession and Inheritance

      Leonard, Brian; Mahon, Marie; Kinsella, Anne; O'Donoghue, Cathal; Farrell, Maura; Curran, Thomas P; 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.
    • Risky (farm) business: Perceptions of economic risk in farm succession and inheritance

      Leonard, Brian; Farrell, Maura; Mahon, Marie; Kinsella, Anne; O'Donoghue, Cathal; Royal Dublin Society; Teagasc Walsh Fellowship Programme (Elsevier BV, 2020-04)
      Highlights • Generational renewal is high on the political agenda for agriculture, with young farmers linked to positive outcomes. • There are limited policy incentives for older farmers to consider engaging in the farm succession and inheritance process. • Farmers perceive risks and uncertainties regarding the transfer process, and thus avoid handing over to their successors. • Taxation, retirement income, long term care cost, and marital breakdown are motivations for farmers to retain ownership. • Financial incentives related to generational renewal must aim to alleviate the level of risk perceived by farmers.
    • Using the EU-SILC to model the impact of the economic crisis on inequality

      O'Donoghue, Cathal; Loughrey, Jason; Morrissey, Karyn (Springer Open, 23/12/2013)
      In this paper we attempted to chart the impact of the early part of Ireland’s economic crisis from 2008–2009 on the distribution of income. In order to decompose the impact of changes in different income components, we utilised a microsimulation methodology and the EU-SILC User Database. This simulation based methodology involved the disaggregation of the 6 main benefit variables in the EU-SILC into 17 variables for our tax-benefit model. Validating, our results were positive, giving us confidence in our methodology. We utilised the framework to model changes in the level of income inequality from the period just before the crisis in 2004 to the depth of the worst year of the crisis in 2009. In terms of the impact of the economic crisis, we found that income inequality fell in the early part of the crisis modelled in this paper. Much of this change was due to rising inequality of market incomes, (even when discounting unemployment). This was due to the differential effect of the downturn on different sectors where some sectors such as the construction and public sectors were significantly hit, while the international traded sectors have been relatively immune from the downturn and have seen continued growth. The impact of the tax-benefit system has been to mitigate this upward pressure, with a gradual rise in the redistributive effect of the tax-benefit system driven by an increase in demand on the benefits side and increased progressivity on the tax side. Jel codes H22, H55, C15
    • Willingness to Pay For Achieving Good Status Across Rivers in the Republic of Ireland

      Buckley, Cathal; Howley, Peter; O'Donoghue, Cathal; Kilgarriff, Paul; Environmental Protection Agency (The Economic and Social Review, 2016-09-26)
      The Water Framework Directive mandates EU Member States to achieve good status across all surface waters. Derogations from this have to be proven based on infeasibility or disproportionate cost. This study explores public preference for water quality objectives and assesses willingness to pay (WTP) for achieving good status across all rivers in the Republic of Ireland using contingent valuation. Mean WTP for achieving full good status across rivers was estimated at €19 per respondent per annum. WTP was influenced by social class, subjective perceptions relating to household financial status, education, recreational use, environmental values and river basin district.