Economic Profile

The composition of the local economy can be determined by using the “At Work by Industry” measure of the most recent census of population data. The economic sectors are weighted according to current employment levels rather than economic value. Data for 1996 reveals the following percentages for the combined West Cork, Lee and Owenabue Valley areas: 

(Source: GAMMA,1998)

The figures reveal a considerable dependence on agriculture and agricultural related activity within the region.  Whilst agricultural employment has decreased dramatically in recent years, its proportion of the total workforce at 27% and 20% for 1991 and 1996 respectively, still represents twice the national average for those years. Considerable variations exist in agricultural employment at DED level. In eastern areas it comprises as little as 5% as opposed to 60% of total employment in some western areas.   Employment in the construction sector also exceeds the national average. In light of the recent economic growth, it is believed that employment in this sector has expanded dramatically, in many cases absorbing the declines in agricultural employment in western areas.  The region accounts for a lower level of employment in the professions, commerce and public administration.

A further measure of commercial activity within the region is contained in the IDS business database.  This records a total of 3,822 companies registered in the West Cork, Lee and Owenabue Valley area. Source: GAMMA (1999).  Companies classified as “retail” and “catering and hospitality” account for 40% of the total number, with Carrigaline and Bantry respectively accounting for the highest concentration of enterprises within these sectors.   A breakdown by SIC business classification is contained in appendix 5.

An assessment of the key components of the local economy is presented as follows:

• Agriculture

• Organic Farming

• Fishing

• Forestry

• Local Services

• Manufacturing

• Information Technology

• Tourism

By comparison with the national average of 10.2% employed in agriculture, West Cork at 20.1% is seen to be very dependent on this sector. There has been an actual drop in agricultural employment of 1,661 from 1991 to 1996. At DED level the picture is much starker in terms of dependency and the drop in numbers, particularly in areas away from the main towns and tourism zones.

                                Source: GAMMA (1999)

In light of current trends and EU and WTO proposals, the number of full time farmers is projected to fall by upwards of 50% over the next ten years, with an increase in part-time farming, the overall drop will be close to 32% Source: Department of Agriculture, Food and Rural Development (2000). In addition, competitive pressures due to world trade liberalisation will have a downward effect on prices thereby increasing the viability threshold for farm size. It is anticipated that new employment opportunities and new approaches to alternative farm enterprise will be required in West Cork for over 3,000 farmers.

                                Source: Galvin, J., 2000.

The older age profile of Irish farmers has a significant impact on the type of farming pursued and the longer term viability of farm enterprises. Based on 1991 figures the situation in West Cork was relatively favourable, and the percentage over 65 was lower than the rest of Ireland, with a higher number of young farmers (defined as being under the age of 35 years). This is perhaps a result of the prevailing practice of farm transfer prior to the death of the owner. In turn the Farm Retirement Scheme has also been particularly popular among West Cork farmers. Source: Teagasc (1999).

The Rural Environmental Protection Scheme (REPS), introduced in 1994 is a voluntary scheme providing payments to farmers that implement an agreed management plan for land use, waste and the protection of natural habitats. The scheme has had limited appeal in West Cork due to the intensive grazing levels in most of the area. REPS farms are most common on the western peninsulas, where upwards of 50% of farms are involved in some DEDs. Source: Teagasc (1999).

The area is characterised by relatively small farms, which are very often fragmented. Source: Lafferty (1999). Whilst average farm size at 28.5 hectares is close to the national average of 26 hectares, there is a higher proportion of rough grazing land (generally poor land for beef or sheep production), this is concentrated in the western upland areas.

(1999). It is also anticipated that increases in quota recently granted to Ireland and 4 other member states will result in a further decline in prices Source: Binfield  (1999).

Farming Regions 1991

Source: Lafferty et al., 1999

The southeastern part of the LEADER area – east of Kinsale has quite a number of tillage farms, mostly barley but also a quantity of wheat and sugar beet. Inland in the eastern half of the area mixed tillage and dairy farming is common. Horticulture, including vegetable growing, fruit, flowers and nursery stock, continues to decline in the area.  This is most marked in the west of the region where there has been a decline of 55% to 100% throughout. Vegetable growing is concentrated in the area around Cork City and along the Lee Valley. Fruit growing is likewise found near the city and also around Bandon.  West Cork LEADER Co-op has been involved in a number of growing initiatives in these areas particularly daffodil and onion growing.

Organic farming has the potential to offer greater returns per hectare and as such may be of interest to small holders. This can be illustrated by the gross margin for beef production per hectare on an excellent conventional farm which is estimated at £590 (€749). For an organic farm in its third year of production a gross margin of £907 (€1152) is achievable. Source: Reck (2000).  Likewise the return on labour can be up to 24% greater. Source: European Commission (1999). This is particularly significant when combined with the need for greater labour intensity, suggesting that organic farming should help to reduce the decline in agricultural employment.

The table below gives details of what is being produced on organic farms. Beef and lamb predominate. In many cases these are being produced on the same farms. Grassland is the main land use, with fruit and vegetables being grown on many units. Mixed farming is characteristic of the organic sector. In a recent national study by An Bord Bia it was found that 26% of fruit and 35% of vegetables were grown for home use. Source: Reck (2000). It is clear therefore that production levels are relatively low and in many cases non-commercial in nature.

Whilst consumer attitudes to organic food in Ireland are positive, expenditure by consumers is low – one in three households buy organic produce at least once every three months but only spend an average of £20 (€25) per month Source: Bord Bia (2000). Urban areas account for most of sales but production is largely at remote locations removed from markets.

Production is expected to grow by 20-30% nationally over the next three years. This should allow the development of more viable outlets for produce as the limited quantity and seasonality of supply have been major constraints in market development to date.

There is concern among the existing bodies that this will have a negative impact on Irish organic exports and consumer confidence. Perhaps of greater concern is the loss of the expertise and the structures created by these bodies. The move may, however, encourage a greater number of commercial farmers to convert at least part of their enterprise to organic.

West Cork should be well placed for development in this sector based on a number of factors:

1.        Significant level of existing local knowledge may have snowball effect both in terms of demonstration value and access to support.

2.        Younger age profile among farmers relative to other regions where organic farming is practiced.

3.        Established marketing structure for local food products – Fuchsia Brand.

4.        Innovative secondary processing food sector among which there is a demand for organic ingredients.

Fishing and mariculture are critical industries in the economic make-up and future of the area. The southwest (Cork and Kerry) has one of the major concentrations of seafood industry within the state, representing about 15% by value of the national wild fish landings and about 20% of aquaculture production. Apart from inshore and offshore fishing, the industry includes processing, aquaculture, ancillary sectors and support services (packing, transportation, marketing, equipment manufacture and maintenance). The seafood industry provides employment for over 5,000 people in Cork County Source: National Strategy Review Group on the Common Fisheries Policy, (1999), at least 75% of which is reckoned to be with the defined territory. This means that about 3,750 people in total depend on the industry for at least a part of their income, which includes about 2,500 who are directly involved, see estimates below.

Sources: NSRG (1999); Fitzgerald (1999)

There are 12 fishing ports in the region, the largest port in the area and second most important in the state being Castletownbere.   There are a further 5 secondary ports and 6 others as listed below.

Source: Fitzgerald (1999)

Most of the ports are located in areas where factors such as distance from main economic centres, sparse population and poor agricultural land combine to reduce employment opportunities.  The income from part-time employment in fishing, processing and aquaculture makes an essential contribution to livelihood where alternative incomes may be insufficient or seasonal (farming and tourism). Source: National Strategy Review Group on the Common Fisheries Policy, (1999)

The fishing industry faces a number of challenges over the next five years for in terms of structural change, fleet modernisation and the development of processing facilities (particularly larger scale units). The Department of the Marine’s capital support for private and co-operative investment is ongoing with new programmes currently being prepared.  Significant upgrading of the whitefish fleet, particularly in Castletownbere, has taken place over the last few years. This has been matched in part by investment in primary processing facilities on shore (sorting, grading and filleting), though there remain areas to be addressed particularly as large quantities of ungraded fish are still shipped to the Continent for further processing prior to retail.

The continuity of the supply of quality raw material is largely dependent on the capability of the offshore fleet to operate in waters distant from home ports and in all weather conditions. Quota restrictions in place on a number of the most important species remain a limiting factor.  However, there remain significant opportunities to be realised among non-quota species and in aquaculture, which is not subject to production quotas. 

Increased output and higher value added is required from the secondary processing sector. This has been spearheaded by a number of smaller companies in West Cork, particularly in the shellfish sector, smoked fish and frozen fish. The small scale of most enterprises, however, remains an issue in terms of market development.

Total land area under forestry in the region is currently about 26,000ha Source: SWS Forestry (2000), or 7.9%. The land planted is largely marginal agricultural land, much of which was formerly unenclosed mountain or bog. Government policy is to increase national tree cover to 17% by 2030.  Less than 17% of woodland in West Cork is broadleaf, the remainder being coniferous (79%) or mixed. Source: An Taisce, West Cork Woodland Survey, (1998). It is national policy to increase the level of broadleaf trees being planted to 20%.

About 24% of forestry is privately owned, although 77% of new planting in 1998 was private.  Source: Irish Timber Growers Association, (2000). The majority of private planting was undertaken by farmers (78%), although there is also a minor level of planting by investors Source: Lafferty et al., (1999). The introduction of the REPS scheme has slowed down the rate of private planting due the higher costs of acquiring land.

Annual premia to farmers of £175 (€222) to £290 (€368) per hectare of coniferous plantation, often on poor land are an important source of income for farm enterprises that may be marginal. Annual premia for broadleaf plantations are within the band of £250 (€317) to £340 (€431). Such grants are payable for 20 years and are coupled with an initial grant for planting.

  There were 102 people directly employed in forestry in 1996. In addition, there are significant numbers employed in the associated timber industry – sawmills, pulp and pallet manufacture.  The largest sawmill in the area employs c.120 people.  Almost all commercial timber is softwood from coniferous forests.

  Woodlands and forests can be an important part of the local environment if properly managed. They can provide habitats for a diverse range of flora and fauna, provide a renewable natural resource and offer a valuable local amenity.  The West Cork Woodland Survey carried out by An Taisce West Cork in 1998 details the special interest value of woodland states:

“Landscape and scenic interest, was the most commonly recorded special interest feature – 61.4% of woodlands fall into this category. West Cork is dependent on tourism, which in turn is dependent on preserving the natural beauty of the landscape.  Maintaining broadleaved woodlands as landscape features, should clearly be a priority.  The Department of the Environment booklet on Tree Preservation Orders (TPO), suggests that Councils survey their trees and woodlands with a view to protecting those which, among others: have intrinsic beauty which can be appreciated over a wide public area; contribute to the distinctive character of an area or are a significant feature of an important scenic view.  Unfortunately, there are only a handful of TPOs in place in West Cork.”

The survey also records damage to woodlands and threat of further damage. Most of the broadleaved/mixed woodlands face some form of threat, the major causes of damage being grazing (35.5%), felling (19%) and invasion by exotic species particularly rhododendron (13.7%).  The involvement of farmers with REPS, has had a positive impact on the management of existing woodlands.

There is growing concern among local communities at the level and nature of coniferous planting in certain areas of West Cork.  This is voiced where sitka spruce plantations blanket whole areas without regard for visual impact and the existing contours of the landscape. Clear-felling large areas, though less common, is still practiced. This can result in not only in the visual degradation of the landscape, but can also have a detrimental effect on habitat, soil and water quality.

The West Cork, Lee and Owenabue Valley region contains variable levels of services sector development.  In recent times, the strongest level of employment growth has been in private sector services and in commerce and retail adjacent to urban areas. The services sector has been the major source of employment growth in the area accounting for 96% of employment growth from 1991 to 1996. Whilst over 53% of all jobs in West Cork are in services, this is still well below the national average at 64%.

For the most part, service sector growth has been fueled by the growth in consumer spending and demographic changes.  In this respect, population growth and the comparatively high levels of household income in the region’s larger towns has been a key growth driver in local private sector service employment.  In particular, the region’s economic infrastructure has benefited from an increase in the provision of a broad range of professional services.  Aside from professional services however service sector employment can be poorly paid, part-time/seasonal and with limited opportunities for progression.  The viability of some local services can also undermined by seasonal fluctuations in demand.

The following table denotes the key services available locally at the beginning of 1999.

The public services provided, in particular schools, post offices and health care, are critical to the viability of rural communities. The future of the a range of public sector services is threatened by a range of factors including:

1.        Rationalisation within the public sector. Whilst the wave of post office closures of the early 90s has been temporarily halted as pressure on government expenditure has eased, nevertheless, such services remain vulnerable.

2.        Alternative means of delivery.  The increased use of telephone and internet banking have already led to bank sub-office closures.  A further erosion is expected over the short to medium term.

3.        Labour shortages have led to cutbacks in service in the health care sector in urban areas, but the threat may soon affect rural areas.

4.        Increased mobility has led to the further centralisation of services in Cork City and the urban areas. Not only does this put pressure on local shops but also results in declining use of schools and local post offices and other local services.

5.        Changing demographics. Declining and/or aging population in villages arising from the lack of serviced development land in rural areas.

Quite apart from its contribution to local employment, the provision of a good range of services will assist rural communities thrive and prosper.  It is also critical in attracting new commercial investment to the region, vital factors in ensuring the viability of local communities, existing businesses and to the active management and care of the countryside.   Conversely, poor service infrastructure undermines rural viability, social fabric and family networks with adverse effects on the economic and social well-being of rural communities.

  Manufacturing accounts for almost a fifth of the region’s employment, a proportion which has remained largely static over the last decade. In order to assess the economic value of the sector, it is worth distinguishing between the nature and scale of local manufacturing activity. The key components of the region’s manufacturing base are pharmaceuticals, electronics, food processing, textiles/clothing, furniture/timber processing, craft, plastics, light engineering, as well as general building materials and agri-related activities.  The region’s prime natural resources as well as the ready availability of development supports from Enterprise Ireland, the South & West Cork Enterprise Boards and the West Cork LEADER Co-op has allowed a number of SME’s to take advantage of commercial opportunities in value added processing on domestic and overseas markets.  In all approximately 50% of local manufacturing firms are involved in food, fish and agri- related activities with these firms forming the core of the manufacturing base in remoter rural locations.  However rationalisation within the retail sector and the advent of central billing/distribution as well as the discipline involved in servicing export markets, while prompting new product development and investment in improved plant and processes, is expected to impact on a significant number of smaller firms in the region.  Additional pressures on the indigenous manufacturing sector will come in the form of labour shortages, access to markets, new technologies and contractions of agriculture and fisheries output.