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2. Current Trends and Challenges for Rural Areas

Irish society and the economy have changed rapidly during the 1990s. The following brief overview outlines recent economic and social trends, changing needs and the challenges confronting rural communities for the future.

a) Demography
On the basis of the 1996 Census data, some 58% of Ireland's population live in combined towns and suburbs with more than 1,500 inhabitants; the remaining 42% live in small villages and in the open countryside. If one excludes County Dublin, 58% of the national population live in rural areas (based on the census definition of 'rural'). Based on the more general definition of 'rural' which is set out in the White Paper, this proportion would be significantly higher. Population density in Ireland is amongst the lowest in Europe, with 52 persons per square kilometre in 1996, compared to an EU average of 115.

The overall rural population, as defined by the CSO, has been relatively stable at around 1.5 million for some time and has shown an increase in the most recent intercensal period, 1991-96. While all regions have shown some level of increase, the recovery in the rural population has not been uniform across all rural districts. Significant population growth has been confined to the greater Dublin region and to the smaller urban centres. Between 1971 and 1996, the rural population increased by a total of 7%, while the urban population increased by 36%.

Maps 1 and 2 illustrate relative population densities throughout the country based on the 1996 census and population change in the period 1991 to 1996 respectively. These maps demonstrate in graphic form the key influence of urbanisation on settlement patterns which was reported by the National Economic and Social Council in "Population Distribution and Economic Development; Trends and Policy Implications" (1997). The Report found that counties with strong urban centres retain population whereas those with the lowest urbanisation rates experience large and persistent population decline. In addition to identifying an evolving settlement pattern from rural to urban and from West to East, the Report found that increasing proportions of the State are becoming closely associated with Dublin or one of the other major urban centres. Unfortunately, certain counties and parts of counties have clearly fallen outside of the influence of such centres and continue to lose population. These areas have unfavourable age structures, fail to gain access to an adequate share of new investment and frequently experience extreme forms of marginalisation.

Rural areas also have higher than average dependency levels particularly in the western and border counties where those in the over 65 years category comprise an extremely high proportion of the population (Map 3).

The combination of a high dependence on agriculture, the lack of a diversified employment base to sustain or generate off farm income and employment opportunities, (particularly the absence of quality jobs), and the out-migration of those with higher levels of education has undermined the economic structure of many rural areas. Map 4 shows the distribution of population change in the 18 to 25 year old category during the period from 1991 to 1996. The loss of educated, dynamic and ambitious young people depletes the crucial entrepreneurial resource and impacts on the morale of the community as well as the social and cultural quality of life. An imbalance in the population structure in the form of a high dependency ratio also erodes the capacity of the community to act collectively on its own behalf and contributes to increased marginalisation.

The demographic situation has implications for public and private service delivery and there is a trend towards service concentration in urban centres. The reduction of population in areas already sparsely populated, increases the unit cost of service delivery to such areas and weakens the investment potential for private sector economic development.

b) Agriculture
While the majority of rural dwellers are now neither farmers nor directly dependant on agriculture, the industry remains and will continue to be one of the most important sectors in both the rural and national economies.

Primary agriculture accounted for 5.2% of GDP in 1998, compared to almost 17% when Ireland joined the EU in 1973. Nevertheless, it remains more important to the Irish economy than it is to the economies of 13 of the 14 other EU member states; and the contribution to GDP in Ireland is twice the EU average. Taken as a whole, the agri-food sector (including agriculture, food, drinks and tobacco) accounted for 12.7% of GDP in 1998.

The total number of farms has declined from 228,000 in 1975 to 146,300 in 1998. In the same period, average farm size increased from 22 hectares to 29.5 hectares compared to an EU average of 17.5 hectares. Nearly half of all holdings are under 20 hectares and just over 14% exceed 50 hectares. The decline in farm numbers has occurred mainly in farms under 20 hectares while the number over 30 hectares has risen. There is considerable variation in farm size on a regional basis - farms in the Mid East and South East are, on average, twice as large as those in the West and Border regions (Map 5). The level of intensity of production also increases from the north west to the south east of the country.

Employment in agriculture has declined in line with the reduction in farm numbers. Nevertheless, agriculture still accounts for 8.7% of total employment, and the agri-food sector as a whole contributes 11.8% of employment.

The agri-food sector accounted for 12% of Irish exports in 1997 and is estimated to be responsible for 33% of net foreign earnings from trade. While agri-food's share of GDP and employment will most likely continue to fall as new sectors of the economy grow to their full capacity, the sector will remain a significant source of national wealth.

The age distribution of farmers is a major structural weakness in Irish agriculture. At present, only 12% of farmers are under 35 years while 22% are over the age of 65 years. Almost one third of farmers over the age of 65 years are in the West of the country and a further quarter have holdings in the Border region. The Scheme of Early Retirement from Farming has had some success in (i) encouraging the earlier transfer of farms and (ii) facilitating an increase in the average size of farms.

Thus, economic trends and market forces, in combination with the Common Agricultural Policy, have concentrated output, resources and income among a contracting number of farmers. Policies have had the effect, to some extent, of increasing the income gap between large and small farmers. A reasonable correlation between farm size and gross margin is evident from Map 6.

There is considerable underemployment on farms in certain areas which is directly related to the viability and economic size of holdings. In an analysis of the National Farm Survey (1992 -1994), Teagasc classified 30%, or only about 50,000 out of 159,000 family farms, as economically viable. A total of 33,000 were deemed demographically non-viable, had limited resources, a high age profile with no heir to take over the farm and many were in receipt of at least one pension. The analysis showed that the majority (70%) of viable farms had dairying as their main occupation while the dominant enterprise on non-viable farms was drystock production. The National Economic and Social Forum in its report entitled "Rural Renewal- Combating Social Exclusion" (1997) estimated that by the year 2005, there could be a reduction of over 40,000 in the number of farms with the greatest reduction occurring in the category now classified as non-viable farms.

Table 1 National Farm Survey Results by System, 1997
  All Systems Dairy Dairy + Other Cattle Rearing Cattle Other Mainly Sheep Mainly Tillage
% of farms represented 100% 19% 14% 21% 27% 14% 5%
Family Farm Income (£) 10,798 19,980 17,519 5,594 5,752 7,738 14,676
Direct Payments as % of FFI 62% 22% 50% 105% 98% 94% 107%
Off-farm Job Holder/Spouse % 43% 30% 26% 56% 42% 55% 43%

Source: Teagasc, National Farm Survey, 1997

Table 2 Farm Income and Direct Payments 1992/98

The CSO's Household Budget Survey 1994-95 showed that, on average, only 53% of farm household income derived from farming activities. The balance was derived from off-farm employment (31%), state transfers (12%) and other sources (4%). The level of dependence on farming did not vary substantially across income groups. However, in general, lower income households had a greater reliance on state transfers (about half of which were old age pensions), while higher income groups derived a higher proportion of their income from off-farm employment. Thus, the growth in part-time farming has been an important structural change in Irish agriculture. In 1997, for example, farmers and/or spouses on 43% of farms had an off-farm source of income.

There is considerable variation in farm income on the basis of size and system of farming. Table 1 shows, using results from the 1997 National Farm Survey, that drystock farmers (cattle and sheep systems) have, on average, much lower incomes than dairy and tillage farmers. Direct payments to farmers, financed or co-financed by the EU, account for an increasing percentage of farm income - up from 22% in 1992 to 56% in 1998 - and this trend will continue under Agenda 2000. Table 2 shows the increasing contribution of direct payments as a proportion of farm incomes. Drystock farmers are almost entirely dependent on direct payments for their farm income, and are also more likely to have off-farm employment.

The policy environment in which agriculture operates will, of course, be important in determining the future. For example, the Agenda 2000 reform of the Common Agricultural Policy which was finalised earlier in 1999, provides for reduced price support and increased premia payments. Similarly, negotiations on the next World Trade Organisation (WTO) agreement, which will begin at the end of 1999, will involve demands for further agricultural trade liberalisation.

The Agenda 2000 agreement provides a solid basis for the future development of the Irish agri-food sector in the context of the next round of WTO negotiations. However, availing of this opportunity will require improved on-farm efficiency and an increasingly competitive and consumer-focused food industry. While individual farm households may face problems in adjusting, the new environment will bring new opportunities. It is also highly probable that the current trend of increasing off-farm incomes in farm households will continue as the economy grows.

The increasing inter-dependence of the farm and non-farm economies emphasises the importance of an integrated rural development policy aimed at maintaining viable rural communities.

c) Forestry
Total forest cover in Ireland is approximately 600,000 hectares or 8% of the country's land area. Ireland is the least forested country in the EU, where the average is over 30%. The aim of "Growing for the Future" the Strategic Plan for the Development of the Forestry Sector in Ireland (1996), is to increase forest cover to 17% of the land area by 2030. Forestry is by nature a rural activity and has direct benefits for local communities (i) through the establishment of plantations, (ii) in spin-off effects in support services, through industries ranging from woodcrafts to industrial processing, (iii) in rural tourism and (iv) by enhancing the environment. Forestry is also a valuable alternative agricultural activity and a source of income through premium payments and ultimately, the sale of the timber produced. Farmer involvement in forestry has been an increasing feature in recent years - with over 70% of planting being undertaken by or on behalf of farmers with EU support - a trend that is likely to continue.

The forestry sector involves not only the planting and harvesting of trees, but also the processing of timber in both the industrial and craft sectors and associated activities such as transport, harvesting, nurseries, etc., all of which provide employment and added value. Employment in the sector is projected to increase from 16,000 to 27,000 by 2020.

d) Employment
The growth in employment over the past decade in Ireland has been among the highest in the EU. Employment increased by over a quarter between 1993 and 1998 (from 1.183 million to 1.495 million). This increase in employment has impacted on rural areas. For example, for every job lost in agriculture during the period 1991 to 1996, 4.5 jobs were created within other sectors in rural areas (Table 3). Almost 51,000 (over 50%) of the new jobs were filled by women. There was a significant growth in self-employment which accounted for 28% of the additional jobs filled by men and 12.8% of those filled by women.

Table 3 Changes in numbers at work in Rural Districts, aggregated to regional level, 1991 - 1996
 
Total (Males and/Females)
Region (1)
Agriculture
Other Sectors

Border

- 3,324

+ 13,897

Mid East

- 1,660

+ 20,972

Midlands

- 1,815

+ 8,321

Mid-West

- 2,721

+ 12,184

South-East

- 3,054

+ 13,283

South-West

- 4,154

+ 18,707

West

- 5,712

+ 12,865

All

-22,440 + 100,229

(1) Regional Authority Regions

Source: Census of Population 1991 and 1996.

The Percentage Employment Change in the period 1991 to 1996, as illustrated in Map 7, suggests that employment growth is indeed anchored within commuting distances of centres of substantial urban population. Employment growth was mainly in the services sector and the highest increase in overall employment growth occurred in Dublin and the South West regions.

These trends indicate the difficulty for rural areas, and especially more remote areas, in attracting a proportionate share of new jobs in industry and the expanding services sector. Over 60% of total employment in Ireland is now in the services sector and this is expected to increase to 66% by 2005. At present 40% of all service sector employment is located in the Dublin area which also has a high concentration of high-tech, computer software companies.

The differential overall pattern of employment creation within the country's regions is perhaps not surprisingly reflected in the associated changes in unemployment levels. (Table 4).

Table 4 Unemployment rate by region, Spring 1998:
Unemployment
Rate

Border

10.4%

South East

9.7%

Midlands

8.0%

South West

7.9%

Dublin

7.2%

Mid-East

7.1%

Mid-West

6.9%

West

6.6%

Total

7.8%

Source: CSO Quarterly National Household Survey, Mar-May 1998

Clearly, planning for the future must recognise the need for increased employment opportunities on a regional basis in order to sustain viable rural communities. The infrastructures and services which are required to support such job creation point to the need to channel economic development through a network of small and large urban settlements.

e) Poverty and Social Exclusion
Rural development has a major social equity dimension. Unemployment, educational disadvantage and inadequate income are common to those at risk of, or living in, poverty in both urban and rural areas. However, the problems of rural poverty and exclusion frequently manifest themselves in a significantly different manner from those in urban areas.

The National Economic and Social Forum (1997) identified the following groups as being at an increased risk of poverty in rural areas; unemployed people, women, people with a disability, older people, migrants, local authority tenants, travellers, lone parents, Gaeltacht communities, fishermen and farmers on small holdings.

There is convincing research evidence that unemployment is the main factor causing poverty. While there has been a considerable reduction in unemployment, long term unemployment remains a problem, accounting for 50% of the unemployed in 1998 (compared to 64% in 1987). Households where the head of household is long-term unemployed are at a particularly high risk of poverty. A low level of educational attainment is a key feature among those experiencing poverty and social exclusion. Indeed, unemployment is heavily concentrated among those who have not completed second level education.

The problems experienced by unemployed people and their families are the same in both urban and rural settings and many are interrelated. Typically they include: very low income, poor housing, difficulty in accessing basic services and in receiving quality training. Consistent with reported research findings in relation to risk factors for poverty, unemployment and labour market exclusion are more likely for women caring for children, older people, people with disabilities and lone parents. The problems of economic dependency, isolation and unequal opportunity are compounded by distance from services and amenities. The absence of an adequate transport service in many areas makes it difficult, for women especially, to avail of training and education. Thus, the provision of transport is a major priority for those living in rural areas especially in the context of a tendency towards service concentration in larger centres.

Research has shown that the risk of poverty for households in open country declined between 1987 and 1994 but that households in villages and towns with less than 3,000 inhabitants had the highest risk of poverty nationally at both points in time. The situation in the open country was due largely to an improvement in farm incomes over the period indicated. The data does not take into account the particular problems experienced by sections of the farming community during 1998 due to the fall in cattle prices and adverse weather conditions. Map 8 illustrates the distribution of disadvantage in graphic form.

In the rural context, poverty and disadvantage are often invisible due to the scattered settlement pattern and a landscape which may not necessarily appear deprived. Thus, the social mix of rural communities does not conform to the concentration or residential segregation of disadvantaged communities in urban areas. The rural social structure is also characterised by a tendency to keep private the individual or household experience of poverty. The low level of awareness of rural poverty is frequently combined with low levels of participation in local development mechanisms and development activity with an anti-poverty focus.

Social justice demands that rural development policy must recognise the needs of those who are most disadvantaged and enable them to participate fully in the development of their areas.

f) The Environment
There is a rapidly growing awareness and concern for environmental issues and sustainable development.

The pattern of land use, the shape of the landscape and the quality of rivers and lakes are influenced by many factors, including agricultural practices, urban expansion, rural housing and settlement patterns, economic development in tourism, industry and enterprise, coastal erosion, mineral extraction and increased car usage. The visual amenity of rural areas has, in certain instances, been affected by developments such as forestry, infrastructure, electricity transmission facilities, telecommunications masts and new renewable energy generation mechanisms such as wind farms.

There is little doubt that modern intensive farming methods can be a source of environmental damage. Indeed, agriculture which accounts for approximately 70% of the land area of the country, is widely recognised as holding one of the keys to protecting and enhancing the environment in terms of ecology, and water quality and generally shaping the physical environment. This is reflected in the increasing and ongoing focus of agricultural policy on environmental objectives. The Rural Environment Protection Scheme (REPS), which is operated by the Department of Agriculture and Food, has a vital role in promoting sustainable agriculture and in responding to environmental conservation and protection objectives. Although only in operation since 1994, some 43,000 farmers are already participating in REPS and over 1.4m hectares of agricultural land are now being farmed under the conditions of the Scheme.

A clean environment is recognised as a contributor to, and as a basis for, economic development. It is of particular importance to tourism, agriculture, food production, mariculture, aquaculture and other natural based industries. The protection of inland waterways and the water quality of lakes and rivers is of critical importance in supporting the tourism industry. In general, a clean and attractive environment is seen as a significant competitive advantage when highlighting the quality aspect of Ireland's products and services as part of the country's international marketing programmes.

Equally, satisfactory environmental standards are fundamental to the quality of both urban and rural life. The concern with a green image is reflected in the growing tendency for rural communities to resist industrial or other developments which potentially endanger the natural environment.

Summary
Thus, the challenge for rural development policy is to improve the balance of economic opportunity and social conditions between urban and rural communities using a range of mechanisms, while safeguarding the rural heritage and protecting the environment. If rural communities, and especially people leaving agriculture, can be integrated into the wider economy without geographic displacement, the central goals of rural development will be achieved.

Maps available for download in Pdf format:

  • Map 1 - Population Density, 1996 (1473KB)
  • Map 2 - Percentage Population Change, 1991-1996 (1482KB)
  • Map 3 - Percentage of Population greater than 65 years old, 1996 (1473KB)
  • Map 4 - Percentage of Population Change for 18 -25 year olds, 1991-1996 (1245KB)
  • Map 5 - Average Farm Size (1481KB)
  • Map 6 - Cross Margin per Farm (1336KB)
  • Map 7 - Percentage Employment Change, 1991-1996 (1484KB)
  • Map 8 - Composite Deprivation Score, 1996 (1349KB)