The Harvest 2020 targets, which underpin all of the aspirations for growth in the agri-food sector, are largely being met ahead of schedule, except in dairy where quotas are in place until 2015 .

The beef target of 40 per cent growth has been largely achieved as has the pigmeat figure of 50 per cent, mostly based on growth in value to date rather than output. However, output levels are beginning to grow also.

Last week's announcement by Glanbia Ingredients Ireland of a major investment dairy processing/ value added capacity in Belview, Co Kilkenny, surely means that dairy growth is now definitively on track and represents a real prize for the Irish economy in both jobs and value added .

Analysis prepared for Government and led by Teagasc and TCD looking at the economic multiplier effects of reaching the volume and value growth targets set out in Harvest 2020 , suggested a minimum of 30,000 jobs will be created in the Irish economy and that a maximum of 40,000 jobs is possible.

Dairy growth
Therefore, while Ireland's record in securing foreign direct investment has set us apart from other EU/IMF programme countries in the last number of years, growth in the agri-food sector – and particularly the impact of this growth on jobs and employment – can be another differentiator.

While much of the commentary around the Glanbia investment has focused on the prospect for dairy growth and challenges to achieving it, the reward in terms of jobs and economic activity has perhaps not been as well understood.

Dairy growth is hugely significant because the supply chain required to achieve this growth is primarily based in the Irish rural economy. Furthermore, because the sector is Irish owned its marketing and R&D dimensions are also largely Irish economy based.

The dairy supply chain is not just the 18,000 dairy farms in the country but also the suppliers to those farms as well as upstream secondary processing industries such as infant formula , cream liquor manufacturing, the sports nutrition sector and finally the beef processing sector.

This supply chain impact means that of the €1.4 billion increased annual turnover deliverable by a 50 per cent increase in milk supply following the abolition of milk quotas in 2015, €1.25 billion will stay in the Irish economy.

Whereas agri-food growth is spread right across the regions and counties and the value created is spent primarily in the local Irish economy, inward investment in recent years has tended to be clustered around the Dublin region or in Cork or Galway.

Furthermore, in the case of foreign direct investment (FDI) companies, their input sourcing Irish economy spend does not have these deep roots.

Forfás figures show the overall agri-food sector sources 80 per cent of its inputs in the local Irish economy against 15 per cent locally- sourced inputs for FDI firms.

In announcing plans for investment in processing capacity, Glanbia was in effect enabling its 4,300 milk suppliers to invest in milk supply growth post-EU quota abolition in 2015.

In support of the ambitions of its suppliers to grow, Glanbia has introduced a fixed-price milk scheme for a portion of milk supplies, to act as a counter to the increased milk price volatility experienced after the reductions in EU market price supports.

In addition, all produce from the new facility will be destined for export markets.

The Harvest 2020 report set ambitious targets for growth in the agri-food sector. The principal drivers of this growth are the competitive supply capability of Irish producers and processors across the agri-food sector, combined with the robust sustainable demand for our agri-food products across EU and global food markets.

A key platform of overall agri-business growth is the 50 per cent increase in milk supplies planned post EU milk quota abolition in 2015. This is the first time since the imposition of milk quotas in 1984 that the dairy sector will experience volume growth.

The best illustration of the potential for dairy growth is the fact that in 1984 Ireland and New Zealand both produced 5 billion litres of milk, yet this year New Zealand will produce 20 billion litres while we remain capped at 5 billion, and will remain so until 2015.

The prize to the Irish economy from the delivery of dairy growth is both enormous and unique: a 50 per cent increase in milk supply is worth €800 million annually at farm level and up to €1 .4 billion at processing/factory level/national economy level. More specifically the jobs dividend from dairy growth is substantial and regionally spread.

Ciaran Fitzgerald is an independent economist working in the food and agri-sector