Dr. Kieran McQuinn:

I will probably avail of my experience working in Teagasc some years ago to address some of those questions, in particular regarding the tillage sector. On a straight comparison between the two issues, it is hard at this stage to quantify that. We had two years of the pandemic, although within those two years we had periods of opening up and closing down.

As for the economic effects overall, the economy still managed to grow quite strongly through the pandemic. That is one of the remarkable features of it. It is a testimony to how strong the Irish economy was performing before the pandemic that it came through the pandemic in quite a strong position. Certain sectors were obviously very badly affected but in general the economy came through quite strongly. As I said, in terms of the fiscal side, the Government and the State spent a great deal of money on the support measures, the pandemic unemployment payment, the wage subsidy schemes, additional expenditure on health and so on, but the key fiscal metrics of debt to GDP, the Government balance, have come back to a more sustainable path in a very quick fashion after the pandemic because of how strongly the economy has been performing. The pandemic had a huge impact but in general terms the economy managed to keep going through it and, as we said, has come out in a very strong position in the immediate aftermath.

In regard to the Ukrainian situation, it depends on how long the conflict goes on, and how widespread it becomes. That is the key issue. At this stage, it is very hard to tell. However, there have already been significant economic impacts, as we have seen. The Deputy mentioned grain prices and the impact on agricultural input prices in terms of fertilisers. There is no doubt that has had a huge impact and will have a big impact right across the globe. The energy market repercussions from this could be huge. We have seen the US and the UK authorities minimising or reducing completely their reliance on Russian oil. We have seen growing pressure for the European authorities to do likewise. The desire to reduce energy dependence on Russia is perfectly understandable but it comes with an enormous cost transformation. It would entail a significant amount of transformation right across the economy.

These are very hard to quantify at this point in time but certainly the downside risks associated with this are substantial and are possibly greater than anything we saw during the pandemic. Equally we do not know whether the whole situation could possibly be resolved quite quickly. If there was a change of government or whatever in Russia, then the military action could be reversed. It is difficult to assess how significant the measures will be over the medium term but certainly in the short term, we have seen significant economic implications of the crisis.

In regard to the implications for agriculture directly, as I said, I spent some time modelling the grain sector years ago. I know from my knowledge there that it is not the easiest thing. Sometimes people looking on from outside think you can switch production from beef and dry stock to tillage or from dairy to tillage. It is not that easy. It requires significant adjustment and so on. I do not think anybody should underestimate the challenges in terms of doing that and underestimate the impact of increasing costs on agricultural production. These costs are obviously going to come through myriad channels as a result of this. There are serious challenges for agriculture as well as the rest of the domestic economy.