Cathal O’Donoghue of the Rural Economy and Development Programme, Teagase gave the speech at the Asia Ireland Food and Agritech Forum in Cork, 14 July as part of Asia Business Week Ireland 2015

1. Asia Matters
Asia Ireland Food and Agritech Forum
14 July 2015
Cork Institute of Technology, Cork
@asiamatters_biz #AsiaIrlFood @asiabizweek
In Food We Trust

2. 14 July 2015
Cork 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)

3. Ireland’s Competitive Edge Through Innovation
in the Agri Food Sector
Prof Cathal O’Donoghue
Head, Teagasc Rural Economy Development Programme

4. 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

5. Exports
 Largest Export Sectors
 Meat
 Dairy Products
 Misc.
 (inc Infant Milk Formula)
 Mainly EU trade,
 Asian markets are growing
Exports
Live animals
Meat
Dairy products
Fish
Miscellaneous
Beverages
Other
Meat
Dairy
Misc

6. Recent Trend in Agricultural Income
-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

7. Food Harvest 2020
- Industry Solution – Smart Green Growth

8. Growth Impact
 Output
 Exports
 Labour
70
90
110
130
150
2007 2009 2011 2013
Food and Beverage Chemicals
Machinery Misc. manufactured
0
2000
4000
6000
8000
2009 2010 2011 2012 2013 2014
EuroMillions
Gross Output
Exports (2009=100)
Source: CSO
0
1000
2000
3000
4000
5000
6000
7000
8000
2009 2010 2011 2012 2013 2014
EuroMillions
Gross Output
70
90
110
130
150
2007 2008 2009 2010 2011 2012 2013
Food and Beverage Chemicals
Machinery Misc. manufactured
Exports (2009=100)

9. 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

10. Opportunities
Global Trends
 Population Growth
 Growing Middle Class
 Urbanisation / Localisation
 Need for Protein
 Food safety, traceability and
sustainability
 Staged Nutrition

11. Competitive Advantage
 Price
 Quality
 Sustainability

12. Competitive Advantage: Price
Dairy Cash Costs as % of output value in EU:
0
20
40
60
80
100
120
140
IE BE DK FR DE IT NE UK
Costsasapercentofoutput
IE BE DK FR DE IT NE UK
Positive 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)

13. Competitive Advantage: Price
Dairy Cash Costs as % of output value outside EU
Source: IFCN and Thorne et al. (2015) analysis (2008-2010)
0
10
20
30
40
50
60
70
80
US$per100kgmilk(ECM)
economic costs milk price
Positive sign for the larger Irish dairy farm in a non EU context

14. Competitive Advantage: Price
Beef Cash Costs as % of output value outside EU
Cash costs
higher than
average non EU
farm0
200
400
600
800
1000
1200
BR-60
BR-400
BR-360
BR-1750
AU-150
BR-680
BR-800
AR-380
AR-630
AR-26K
AU-85
AU-15K
AU-540
AR-800
IE-40
AU-320
AU-375
US-75K
US-7200
CN-300
CA-28K
AU-415
CN-150
CN-70
CN-2000
CN-940
US$per100kgCW
Cash cost Total Returns
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

15. 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

16. Competitive Advantage: Sustainability
Greenhouse Gas Emissions per unit Dairy Output
Proving Green Credentials
Ireland is in a good starting position…
Source: EU JRC

17. Sustainability is a Market Opportunity: Origin Green
Sustainability
an Opportunity

18. The Teagasc model of knowledge innovation

19. Agricultural Knowledge Innovation System

20. Knowledge Innovation System across Value Chain
Farm
Processor
Consumer

21. Leading Farm Level Science and Innovation – huge
improvements in Breeding Quality (EBI)
Source: Kearney (ICBF) and Berry (Teagasc)

22. Multi-Faceted-Food Research Programme
Food Safety
  








23. Need to Reach far-away Markets
Dehydration - Powder Technology
Thermal ‘UHT’
Safety / Stability
Global Exports of Perishable Products
Require Technologies to Deliver

24. Joint venture between Irish Dairy Board
(Ornua) and Teagasc ‘Science Based Innovation’
Launch: October 2013
Partnership with Al Wazeen Trading LLC

25. ICT, Analytics and Big Data
 Traceability
 Quality Assurance Systems
 Animal Genetic Improvement
 Earth Observation  Grass Growth
 Soil Information Systems

26. 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

27. 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

28. Getting to Market

29. 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

30. 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

31. 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

32. Thank You