Middle classes will save Northern Ireland agri-food industry, says bank chief
Demand among the world's middle classes will help sustain Northern Ireland's agri-food producers over the long term despite short-term turbulence, it has been claimed.
Ulster Bank chief economist Richard Ramsey said that producers here had seen tough times, thanks to exchange rate volatility, Russian trade restrictions and panic over Greece.
Farm business income had fallen by 27% over 2014/15 though the farming labour force remained flat, Mr Ramsey said - despite improvements in other parts of the economy.
Ellvena Graham, the bank's outgoing head in Northern Ireland, said farmers and lenders could sustain the industry by working together. She said: "Ulster Bank has made £1.5bn available to lend to businesses this year, and agri-food is a significant target area.
"We have the people and the products in place to support future growth in the industry and to understand both the opportunities and challenges of expansion and export. We are determined toensure that the future prospects for the sector remain positive."
Richard Ramsey said Northern Ireland's agri-sector had faced "significant challenges" in recent months, mainly due to exchange rate volatility.
He added: "More generally, the global economic context has seen trade restrictions on Russia, and the ongoing uncertainty around a potential Greek default, which has introduced volatility to the market.
"Yet the fundamentals of a burgeoning middle class in developing countries continue to provide support for a positive long-term outlook."
Dairy producers have said they have been hit by Russian sanctions as the country had become a major export market for their produce.
Cormac McKervey, head of agriculture at the bank, said exports to Northern Irleand's main trading partner, the Republic, were also less price-competitive than before thanks to the growing strength of sterling and changes to the single-farm payment.
"This has presented challenges for the industry. However, farming is a business that focuses on longer-term time horizons, and we work on that basis."
The bank recently launched a new pasture loan to help farmers improve grassland management practices.
Ulster Bank held the breakfast meeting to give an overview of the agri-sector ahead of its sponsorship of the Balmoral Show from May 13 to 15. It will be seventh year that Ulster Bank has sponsored the Balmoral Show - the most important date in Northern Ireland's farming calendar.
Richard Ramsey's Ulster Fry index demonstrates the effect of falling inflation on food prices. Increases are in percentages, though coffee is up