Oireachtas Joint and Select Committees

Tuesday, 1 October 2013

Joint Oireachtas Committee on Agriculture, Food and the Marine

Economic Importance of Cattle and Sheep Sectors: Discussion

3:30 pm

Professor Alan Renwick:

If I understand it properly, it is a very interesting question. We did not break it down to look at the relative contribution. It is a question of proportionality. Assuming production levels have remained roughly similar since the historic payments were put in place, that is, the most productive ones who got the highest payments are still the most productive farms, those in the higher level are probably adding greater amounts to output and the economy than those at lesser levels. However, it does not allow for changes that could have occurred in the ten years since the payments were based. Proportionately, it is an interesting question, particular with redistribution a likely outcome. Are those with €100 suddenly going to act like those who have €200 if they get an extra €100? That is a difficult question to answer. Intuitively, they know they are not going to expand production to the same extent that was there before but sometimes we must say that we do not have the evidence. We do not have the evidence regarding the direct relationship between payment and production. It is likely that those with higher payments are producing more output and, therefore, contributing more to that overall output than those on the lower payments, notwithstanding changes that have occurred.

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