‘Hiding in plain sight’ no longer

If ever a sector needed a report like this, the farm machinery sector did. Despite its economic value of €4.76bn to the economy, unlike other sectors, it never had a spotlight shone on it previously.

It was, Michael said ‘hiding in plain sight’. The report, titled, Economic Report on the Value of the Farm Machinery Industry in Ireland, has certainly addressed that.
It was prepared by Ifac using a combination of primary research including a national survey of 77 FTMTA members (46 per cent) and a review and analysis of published official data from sources such as the Central Statistics Office, Eurostat and the EU Commission, and it is the first definitive economic assessment of the Irish farm machinery sector. It has captured its value as an indigenous, export-led, technology-driven industry that has created just under 25,000 jobs – directly and indirectly – and exports to 61 countries.

While the significance and weight of the industry would have been felt among the key players within it, there were no specifics, no numbers to back that up. “People were asking how big is the industry? How many people are employed? We didn’t have the answers,” said Michael. “So it’s critically important to commission this report and just get a baseline for once and for all about what the industry is worth? What is its economic contribution? And how many people are involved?”
The FTMTA now wants the sector to be officially recognised as a ‘strategic enterprise and manufacturing sector within the Department of Enterprise, Trade and Employment’. And it now seeks greater engagement with policymakers to ensure that future policies reflect the industry’s unique mix of manufacturing, distribution, technology and service activity across rural Ireland.

Findings

Among the research findings, the report outlined that Irish farm machinery companies are exporting to over 60 countries including Europe, the US, Australia, and beyond. It revealed that 67 per cent of businesses plan to invest in the next 12 months, with 53 per cent of those projects valued at more than €300,000 – mostly in new premises, equipment, technology and staff training.
But as well as highlighting the many positives, crucially, it also caught some of the challenges facing the sector. For example, there is a serious gap between investment and the financial supports that are available to companies. Ninety-four per cent of businesses, it found, fund investment without grant aid. This signals a real need for reform, said Michael: “Some of the feedback we get is that the process for applying for grant funding is so onerous, and that you have to commit to the project before you will get the funding, so it’s cart before the horse, sometimes. Maybe there are ways that we can streamline that process and make it a bit easier."

Skills gap

The report also reinforced the ongoing skills-gap issue that remains a key constraint to the sector. This needs to be urgently addressed, Michael said, and it all points to creating greater awareness of the industry and the high-quality jobs that are available, as well as a reform of the apprenticeships route. He explained: “My son recently qualified with a degree in mechanical engineering. Now, I wonder how many of his college mates would think of applying for a job in the farm machinery sector? In terms of degree level students, it is about us making people aware of the quality jobs that are out there, whether that is in engineering, IT, finance, procurement, or HR.
“When you get down to the technician level and apprenticeships, there are two challenges there. The first challenge is that the courses need to be updated and modernised and made more relevant to the industry. And it’s critically important for us to have a national functioning apprenticeship scheme for agricultural mechanics.
“Then the second challenge is that these days there is a general expectation that school leavers should get a degree when we know that people with apprenticeships are highly sought after and highly paid. So we need to attract more people in there.”
However, competing with other sectors such as pharmaceuticals, for example, is tough said Michael, which is why engagement with all relevant stakeholders is key, he said. “That is Solas, the Department of Education, Enterprise Ireland, local government, so that everybody understands the challenges, but also understands the significance of this industry. Everybody is focused on growth and there is a very positive story coming from this sector, and we can drive it forward. But to do that, it’s going to be critically important to have the right people there for it. So I think we must adopt that partnership approach with schools, educators, government, to help people understand that it is this vibrant, indigenous sector," said Michael.”

Follow through and timeline

Now that the report has been published and a spotlight finally directed at the sector, the FTMTA has really put it up to itself to follow through on all its recommendations. Michael addressed this by saying: “This is a benchmark, it’s a line in the sand, and we need to drive on here from this moment. And that’s going to take investment from everybody – from our executive council members, from the FTMTA wider body, and from everybody involved, not just us as the people that run the association.
Asked if there was a priority timeline in place for FTMTA president, Maurice Kelly said: “We see this as a work in progress for the next five years, minimum. We need to engage with the CSO on the figures because Ifac had to do a lot of work to get those figures [for the report] so we need the CSO to record them differently and divide them into categories and sub-categories so that we can pick up everything to do with our farm machinery sector.
“This is a hugely important document for us to be able to engage with government bodies and we see that bringing rewards such as increased employment and exports.”

Ministerial support

While ministers from the agriculture and enterprise departments were invited to the launch, none were in attendance. Michael explained that Minister for Enterprise, Tourism and Employment, Peter Burke, had confirmed his attendance, but was not present due to a rescheduled cabinet meeting. Michael said he sees this particluar department as being key for the farm machinery sector: “At the end of the day, while we sell into and serve and help the agricultural sector, we are really SMEs and that’s where we want the focus to be on. Unfortunately, we fell victim to that moved cabinet meeting, but I am sure that we’ll be meeting with the minister very soon.”