2012 will prove to be a “challenging but generally positive” year for most sectors in the agri-food industry in Northern Ireland, according to Northern Bank Head of Agricultural Relations John Henning.
Speaking at today’s Northern Bank Agri Outlook Breakfast in the Lyric Theatre, Mr Henning predicted that, despite the significant challenges that 2012 may bring, the industry should continue to perform well this year. “There is no doubt that 2012 will present its own challenges to agri-businesses here in Northern Ireland – be it exchange rates, budgetary pressures, interest rates, retailer power or industry succession,” he said.
“However, with these challenges will come opportunities and, as one of the few sectors that has continued to perform well in the past number of years despite the economic downturn, there is reason to be optimistic about the performance of the agricultural this year and into the longer-term future in Northern Ireland.”
Mr Henning cited CAP reform as being the biggest industry challenge in the short to medium term, saying : “There is no doubt that CAP reform will be the biggest challenge we will face in the next few years and its impact will be felt in the longer term,” he continued. “The current proposals around the CAP are far from where they need to be for Northern Ireland. It is vitally important that all stakeholders engage in the consultation process to influence the negotiations at local, national and European level, lobbying to maximise the CAP budget and ensure any re-distribution of the Single Farm Payment (SFP) is equitable.”
He went on to say that the issue of who has political, economic, trade and natural resource power will also become increasingly important to the agri industry. Referring to the Scottish Agricultural College’s report which was specially commissioned for the Oxford Farming Conference last week, he said: “Global agricultural power is shifting as a consequence of globalisation and the growth of transnational corporations – whilst the US and Europe are important players globally, there is some evidence to suggest that emerging economies are becoming increasingly powerful with a definite shift Eastwards.
“There is an ongoing debate around whom and what governs this power and its potential impact on global agriculture. Although the UK very much punches above its weight in agricultural power, we are a relatively small player in this area and this issue of power will bring about its own competitive challenges here.”
Northern Bank Chief Economist Angela McGowan examined the impact that the ongoing Eurozone crisis could have on the industry. She said: “The continued slippage in the euro could have a far-reaching impact on the agri industry, which has in recent years benefitted from the relative weakness of the pound versus the euro. A strengthening of the pound against the euro in the coming months would result in UK agri exports becoming less competitive, and would in turn see imports become cheaper. This could also have a negative impact on the SFP.
“The uncertainties around the Eurozone crisis and its impact on exchange rates make accurate predictions extremely difficult, but, based upon the industry’s strong performance in the past number of years and given the rising global demand for agri-products, I am confident that agriculture will continue to be one of the key contributors to economic growth in Northern Ireland this year.”