AGRICULTURE INCOME in Ireland is likely to decrease next year but not drastically, Teagasc economists have predicted in a major report on the future of the industry.
Trevor Donnellan and Kevin Hanrahan say that in the event of a world trade agreement, income in the sector would fall by between 5 and 13 per cent a year to 2017.
The experts from the Teagasc Rural Economy Research Centre put forward projections based on no policy changes to 2017 and the impact of two possible WTO trade policy scenarios.
In all cases, the beef industry looks as if it will face difficult times despite the fact the short-term outlook is the best for some time.
They have predicted that the value of the beef industry in 2017 will be the same as last year, €1,489 million, and by then production would have declined by 13 per cent if there were no changes in EU policies.
Should beef not be given special protection in a WTO deal, beef prices would fall by 28 per cent, production by 3 per cent and there would be a loss in output of €380 million per annum. If the so called "sensitive product status" was applied, output in the beef and lamb sectors would drop by 9 per cent. Without that protection though, which would cut import tariffs by 70 per cent, output would drop by 28 per cent.
The overall income figures for beef and lamb in the event of a "sensitive product status" being applied would cut incomes by €130 million a year but without protected status, incomes would fall by €320 million per annum.
Outlining what was likely to happen over the next nine years should current policies prevail, Mr Donnellan said there was a "fairly positive" outlook for agriculture.
While dairy and milk prices were unlikely to dip not much further, and cereal prices still well above levels achieved earlier in the decade, farmers also faced higher input prices.
Demand for dairy products would continue to grow, but the EU would reduce supports for the industry, which would be valued at 7 per cent higher than in 2006.
On beef, Mr Donnellan said, the situation over the medium-term was more uncertain as beef imports into the European Union were likely to resume at some point and production would fall by 13 per cent.
He estimated that beef imports into the EU, with which Ireland directly competes, were likely to increase by more than 20 per cent to more than 800,000 tonnes.
He said the sheep industry was likely to suffer less than beef because of growing demand and export supplies from other countries such as New Zealand might be limited.
On cereals, he said, the outlook was positive and linked closely with the global energy market and prospects were good, given the right weather conditions.
Mr Donnellan and Mr Hanrahan both said they were of the opinion that a WTO agreement would probably be put on ice until 2010 because of elections in the US and India and the appointment of a new European Commission in November 2009.
Mr Donnellan said beef was particularly vulnerable to WTO reform and that gaining "sensitive product status" for it was very important and had been promised by the EU commissioner for agriculture, Mariann Fisher Boel.