Urgent need to transform Ireland’s agri-food systems

Transforming Ireland’s agri-food systems, the way we produce, process, distribute and consume food has been identified as one of the key avenues to achieving many of our climate targets, said EY Ireland strategy and transactions partner, Simon MacAllister.

“The world needs to eat and enabling production is going to become more and more important. That is something that we shouldn’t lose sight of. But the complexity of delivering this is getting bigger. However, Ireland has the tech and expertise in this area in spades.”

According to Bord Bia’s Export Performance and Prospects report, Ireland exported the equivalent of almost €37 million worth of food and drink every day last year to customers in more than 180 countries. The value of Irish food and drink exports in 2021 was 2% higher than pre-pandemic levels in 2019.

MacAllister said that on the production side the era of low cost food is likely over for many categories. “Do we want to be the most competitive only as measured by cost? Ireland has more to offer than that. We have a lot of advantages in sector like dairy. For example, Ireland’s dairy sector is a grassfed system with a relatively lower carbon footprint. But the recent growth in that sector isn’t sustainable and the industry is cognisant of this. The future needs different products produced in a different way. That is the challenge for the country and for its policymakers.”

“We should continue to aspire to lower carbon and methane footprints, lower levels of antibiotic use and ensuring that water quality continues to improve,” he said.

“Labour shortages continue to be an issue. Production can be made more efficient through automation, investment in machinery or digital agriculture. Developments in digital agriculture are already having an impact. Investing in digital agriculture is not cheap but it is one mitigating factor against labour shortages and could fundamentally restructure the sector.”

Sustainability is the biggest focus area for everyone in the sector, said MacAllister. “It needs to accelerate if we are to meet the targets that have been set. Sustainability is something that ends up fuelling the end of cheap food as we price in climate impact and producers need to be nimble in how they react to developments, especially if it is something that ends up giving Ireland a relative advantage.”

To maximise supports, agribusinesses really need to be innovating and involved in the export of technology products or services, said head of food and agribusiness, IFAC, David Leydon.

“Like any early-stage business that is looking to grow and source external funding, the first port of call for agribusinesses should be their Local Enterprise Office. Supports like a Feasibility Grant, a Priming Grant or a Business Expansion Grant can all play a part in securing some early-stage funding.”

Leydon said that for agribusinesses with a greater potential for employment creation and with an export focus, Enterprise Ireland supports provide the next logical steps.

“With the recently announced Pre-Seed Start up fund, Irish start-ups can now access funding supports of up to €100,000 through a convertible loan note. For larger scale investments that are matched with external funding, agribusinesses can access a further €250,000 through the High Potential Start-up fund.”

In the last 12 months, Enterprise Ireland have launched a dedicated agritech team which provides additional support and guidance to Irish agribusinesses as they scale internationally. “Larger companies which are investing in research and export while adding to their staffing levels can access significant funding for capital development, key managers, R&D and IP strategy as well as management training in terms of the Leadership for Growth Programme,” said Leydon.

For well established companies who are not investing in R&D or export, the funding opportunity is more limited but grants for both lean and green initiatives are available. Other sources of funding include Intertrade Ireland, Leader and Horizon Europe for major R&D collaborative projects.

For all these programmes, ensuring your case is presented professionally is vital, said Leydon. “An agribusiness needs to be clear on what makes their business compelling and razor sharp on where the opportunity for growth is. They also need to have a clear product development roadmap, have a good team in place and of course really know and understand their numbers.”

Leydon said that agribusinesses operate in a very competitive environment with a demanding end customer, the farmer. “To stand out in this context, we advise our clients to focus on getting the basics right.”

“Firstly, and this is especially true for agtech companies or early stage agribusineses, getting the product market fit right is vital. Additionally, from a communications point of view, investment in the right video and photography content is paramount.”

Some companies use stock photography and farmers see through this straight away. It simply doesn’t resonate, said Leydon. “It is also really important to get their company structure right. Agribusinesses need to ensure they have the optimal tax structure in place, that back-office processes like invoice management are well managed and that automation is in place where possible.”

“One thing we are also strong on is focussing on employer branding. This ultimately means developing the right culture in your business. This will not happen by osmosis and must be very intentionally created. When agribusinesses are looking for talent this culture piece will be vital over the long term and will help great businesses stand out,” he said.