Economists differ over effects of outbreak

The county's leading economists differ over the effects an outbreak of foot-and-mouth disease would have on the economy.

The county's leading economists differ over the effects an outbreak of foot-and-mouth disease would have on the economy.

Mr Jim O'Leary, chief economist at Davy stockbrokers described the notion of the Irish economy being brought to its knees by foot-and-mouth disease as "fanciful" and reflects a mentality 30 years out of date.

But Mr Alan McQuaid of Bloxham Stockbrokers, backed a warning made by the Taoiseach about the economy tonight, when he maintained that foot-and-mouth posed "a most significant threat" to employment in Ireland.

Mr O'Leary maintains that while an outbreak would have a detrimental effect on the farming community, the current robust health of the Irish economy would absorb any job losses in the sector.

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"Looking at the Irish economy as a whole there is no meaningful sense in which Ireland is an agricultural economy," he said.

He asserted farm incomes now account for only 4 per cent of total household incomes so a fall of 20 per cent in farm income - based on a worst case scenario - would have little effect on national income.

Irish exports of meat and live animals to the EU were valued at over £1 billion in 2000 but there is considerable scope for trade expansion with non-EU countries which accounted for only £233 million last year.

"While the diversion of exports away from the EU will result in a loss of Ireland's price premium the payment of EU subsidies will reduce the impact of such losses on farm incomes and processors' margins," Mr O'Leary said.

But Mr Jim Power, another leading economist, said: "If there was a six month ban on livestock and meat being sold abroad there could be a couple of billion pounds wiped off export receipts."

Additional reporting PA