"ireland’s competitive edge through innovation in the agrifood sector" cathal...
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Asia Matters
Asia Ireland Food and Agritech Forum
14 July 2015Cork Institute of Technology, Cork
@asiamatters_biz #AsiaIrlFood @asiabizweek
In Food We Trust
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14 July 2015Cork Institute of Technology, Cork
Ireland’s Competitive Edge Through Innovation in the AgriFood Sector
Cathal O’Donoghue Head of Rural Economy and Development Programme, Teagase
(The Irish Agriculture and Food Development Authority)
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Ireland’s Competitive Edge Through Innovation in the Agri Food Sector
Prof Cathal O’Donoghue
Head, Teagasc Rural Economy Development Programme
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Ireland’s Agrifood Sector
Pastoral, Grass based Animal Production Grassland is mainly used for milk, beef and sheep production
Family Farm Based System 139,800 family farms, Average size of 32.7 hectares per holding
Large exporter Over 80% of production is exported
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Exports
Largest Export Sectors Meat Dairy Products Misc.
(inc Infant Milk Formula)
Mainly EU trade, Asian markets are growing
Exports
Live animalsMeatDairy productsFishMiscellaneousBeveragesOther
Meat
Dairy
Misc
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Recent Trend in Agricultural Income
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-600
-400
-200
0
200
400
600
800
1000
1200
Net Market Income
• Market Income (Operating Surplus-Subsidy)
Source: CSO
- Market Income wiped out in 2009
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Food Harvest 2020
- Industry Solution – Smart Green Growth
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Growth Impact
Output Exports Labour
2007 2008 2009 2010 2011 2012 201370
90
110
130
150
Food and Beverage ChemicalsMachinery Misc. manufactured
2009 2010 2011 2012 2013 20140
10002000300040005000600070008000 Gross Output
Eu
ro M
illio
ns
Exports (2009=100)
Source: CSO
2009 2010 2011 2012 2013 20140
10002000300040005000600070008000 Gross Output
Eu
ro M
illio
ns
2007 2008 2009 2010 2011 2012 2013708090
100110120130140150
Food and Beverage ChemicalsMachinery Misc. manufactured
Exports (2009=100)
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Food Wise 2025: Local Roots Global Reach
New Agri Food Strategy Continued Growth
Increasing the value of agri-food exports by 85% to €19 billion. The creation of an additional 23,000 jobs across supply chain
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Opportunities
Global Trends Population Growth Growing Middle Class Urbanisation / Localisation Need for Protein Food safety, traceability and
sustainability Staged Nutrition
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Competitive Advantage
Price Quality Sustainability
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Competitive Advantage: PriceDairy Cash Costs as % of output value in EU:
IE BE DK FR DE IT NE UK0
20
40
60
80
100
120
140
Cash
Co
sts
as
a p
er
ce
nt
of
ou
tpu
tPositive sign for medium to longer term competitiveness for larger Irish dairy farm
Average cash costs/output 71% versus 52% Irl
Source: FADN and Thorne et al. (2015) analysis (2008-2010)
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Competitive Advantage: Price Dairy Cash Costs as % of output value outside EU
Source: IFCN and Thorne et al. (2015) analysis (2008-2010)
AR-400
AR-170
NZ-9
13
NZ-5
51
NZ-3
16
PL-147
US-2
000I
D
US-5
000
US-1
577N
Y
US-6
5WI
IE-4
8
US-6
6NY
0
10
20
30
40
50
60
70
80economic costs milk price
US
$ p
er
10
0k
g m
ilk
(E
CM
)
Positive sign for the larger Irish dairy farm in a non EU context
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Competitive Advantage: Price Beef Cash Costs as % of output value outside EU
Cash costs higher than average non EU farm
BR-60
BR-360
AU-150
BR-800
AR-630AU-85
AU-540IE-40
AU-375
US-7200
CA-28K
CN-150
CN-20000
200
400
600
800
1000
1200
Cash cost Total Returns
US$
per
100
kg C
W
BR: Brazil; AU: Australia; AR: Argentina; IE: Ireland; US: USA; CA: Canada; CN: China;
Source: AgriBenchmark data (2013) and Thorne et al (2015) own analysis
Cash Costs average, however economic cost much higher
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Competitive Advantage: Food Quality
Given importance of Food Exports, significant systems in place to quality assure Irish Food Systems first to identify traces of horsemeat in European beef
supply rapid resolution resulting in increased exports
Highest milk quality required for Infant Milk Formula (IMF) Ireland is the world’s largest exporter of IMF
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Competitive Advantage: SustainabilityGreenhouse Gas Emissions per unit Dairy Output
Proving Green Credentials
Ireland is in a good starting position…
Source: EU JRC
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Sustainability is a Market Opportunity: Origin Green
Sustainability
an Opportunity
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The Teagasc model of knowledge innovation
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Agricultural Knowledge Innovation System
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Knowledge Innovation System across Value Chain
Farm
Processor
Consumer
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Leading Farm Level Science and Innovation – huge improvements in Breeding Quality (EBI)
Source: Kearney (ICBF) and Berry (Teagasc)
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Multi-Faceted-Food Research Programme
Food Safety
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Need to Reach far-away MarketsDehydration - Powder TechnologyThermal ‘UHT’Safety / Stability
Global Exports of Perishable Products Require Technologies to Deliver
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Joint venture between Irish Dairy Board (Ornua) and Teagasc ‘Science Based Innovation’
Launch: October 2013Partnership with Al Wazeen Trading LLC
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ICT, Analytics and Big Data
Traceability Quality Assurance Systems Animal Genetic Improvement Earth Observation Grass Growth Soil Information Systems
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Carbon Navigator Big Data based measures Supporting Farm Level Advice Incentivised by Market and Policy
Carbon Navigator helps farmers to identify distance to Carbon Targets
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Teagasc Strategic Links - Building Partnerships in Asia
MOU with Chinese Academy of Agricultural Sciences Department of Science and Technology of Jiangxi Province
Joint research programmes with Chinese Universities Partnership with Chinese Scholar Council (CSC) in supervising
Chinese PhD students in Teagasc Joint Ventures with Ornua in Saudi Arabia
Active pursuit of other opportunities
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Getting to Market
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Getting to Market
Asia Not a homogenous market, e.g. historical context and thus culture different
Many cultural aspects we find hard to understand Significant differences within markets, 1st tier and 2nd tier cities in
China, Differences in attitudes
Sustainability does not mean the same thing in all countries, e.g. China sustainability= food safety
Absolutely essential to have local partner if doing business in these markets
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Cross-Cultural Dairy
Significant cultural differences exists in relation to flavour perception,
Study proposes to understand differences in perception/acceptability based on taste (aroma and flavour) of Irish dairy produce
Consortium include the Sensory Food Network Ireland at Teagasc and UCC and Fujiang Agriculture and Forestry University (FAFU) in China
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Capitalising on Know How
Not just about Selling Commodities Irish Know How in Food Production is Transferable
Strategic Planning Sustainability Farm Systems Food Innovation ICT, Analytics and use of Big Data Developing Civic Society Institutions across AKIS
Cooperatives, Farm Organisations, Farm Media etc Both to developing and developed countries
Potential for Internationally Traded Services
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Thank You