The current mantra in the Irish agri-food industry is about consolidating the processing sector in the belief that economies of scale will lower costs to the extent that Ireland can produce commodities competitively. Given the size of the average Irish family farm, one questions whether this approach will be able to provide the farm-gate prices the typical family farm needs. One also asks whether an approach that invests in highly-automated processing [as per milk driers] is actually beneficial in the context of creating rural employment that, in turn, can supplement the income needs of the family farm. Does the evaluation of agri-food investments currently fall short in terms of using a holistic approach that looks into all the needs of those living in rural Ireland?
In contrast, our approach at RFI is that investments in the food processing sector should be evaluated in terms of i) the returns they can provide to the family farm and, ii) the rural employment that they create. If they are also established as genuine social enterprises, these can be the overriding objectives as shareholders do not come into the equation [as all profits after investment requirement retention would be returned to the social enterprise’s member-suppliers].
This approach also offers up the chance to investigate the lower-technology, ‘artisan’ direction for processing. One can also argue that this is an approach that has to be used in the production of premium foods products and that it is one that premium-paying consumers would expect to see. The trade-off with lower capital investment costs [that may be more suited to on-farm processing] is the lack of automation and, consequentially, higher labour usage. This may, nevertheless, be beneficial to the local economy and, from a holistic rural aspect, a plus. It may also provide a ‘fair-trade’ marketing plus for the products. Hence, it is far from a straight-forward financial evaluation.
A downside of artisan production for an export dependent nation is that it does not produce large volumes of homogenized commodities. This is a rational behind consolidation. The alternative approach offered by RFI is to to consolidate the products post-processing and to use designated quality-and-origin systems to provide a consistent product suitable for consolidation and that occurs with logistics, sales and marketing. There is evidence to suggest that such a system can work and this will be investigated by Regenerative Farming Ireland [see the International page of this website]. It would be an innovative way forwards but it is one that may allow some Irish family farms and rural communities to be more directly involved in the export of premium foods products.