Modelling farm viability

Abstract

Structural adjustment has played an important role in Irish agriculture over time as the number of farms decrease, the amount of labour decreases and the amount of food produced increases; between 1971 and 2005 the number of farms decreased from 228,000 to 133,000 (CSO Farm Structures Survey). In parallel the sector has seen large productivity gains so that the actual volume of food produced has increased despite lower labour input. Efforts to increase productivity in Agriculture go back centuries to the Agricultural Revolution and was an important focus of development policy in Ireland since Independence (Kennedy et al. 68) and although stagnant until after the second world was, a number of government programs saw agricultural output treble between 1950 and 1972 (ibid: 69). Output increased by 20 % between joining the EEC in 1972 and 1984 (ibid: 83). Boyle (1987) using total factor productivity indices found that there was a 1 % increase in productivity per annum over the period 1960-1980. Bureau et al. (1991) found that total factor productivity grew at an annual rate of 1.35 % between 1973 and 1989, while O’Neill et al. (2002:23) found that productivity only grew at 0.7 % per annum in the 1990s. Newman and Matthews (2007) found that total factor productivity growth was 1.5 % per annum in the 1980s and 0.7 % in the 1990s.