With the sun glinting off the Shannon, boats meandering across Lough Allen and green rolling hills in the distance towards Fermanagh, this county on this gorgeous morning easily lives up to its tourist billing of ‘‘lovely Leitrim’’.
In the centre of Drumshanbo, under a plaque to a local fiddler named Ciaran Emmet, a knot of old ladies gossip and marvel at the ‘‘savage’’ weather before one of them says, ‘‘I’m off, girls, for the wedding,” and they disperse to watch the swanky royal nuptials taking place in England.
A few anglers march by, heading for one of the many lakes, while lads outside the Pyramid Bookmakers, dockets in hand, drag deeply on their Rothmans, certain that this will be their lucky day. Down past Conways bar is Laird House, once home to the ‘‘Bo Peep’’ jam factory, an Irish brand which, along with Cadet Cola and Soda Stream, reminds me of a time when little towns like this made things.
Towns like this can do so again.
In fact, in a climate like this, you could grow anything around here.
Up on the hills surrounding Drumshanbo, the huge windmills attest to another environmental gift – wind. Lots and lots of wind. There are natural resources aplenty here and what is needed is the wonderful chemistry of human creativity to make something happen locally.
Without that creativity and the lubricant of credit, the faded photos in Drumshanbo Library from1958 of local people being waved off at the train station on their way to England will simply be re-mastered in digital form as young locals flee again.
Luckily for this part of Leitrim, four local entrepreneurs have come together privately to create an initiative called LABS (Lough Allen Basin) Energy Hub.
But what sort of businesses are they targeting and why? What has this part of the world got going for it, and what is going on in the rest of the world that might make remote parts of Ireland attractive? Let’s consider the following.
The greatest economic dilemma for the future will not be about banks, balance sheets and the movement of paper money all around the world. The big issue is resources, who owns them, who can renew them and their price.
We are potentially moving into a neo Malthusian world, where the irresistible force of six billion new consumers (mainly from China, India and Brazil) crashes into the immovable object of the world’s finite resources, with potentially catastrophic consequences.
We are seeing already this as the price of all commodities goes through the roof.
The price of oil has gone up fourteen-fold since 2000.The price of coal is up five times over a similar period, as is uranium. It is not so much that we are at ‘‘peak oil’’ ,we are at ‘‘peak everything’’, and the prices of all energies will continue to skyrocket. Sure there’s an element of speculation driving prices, but what is really behind this is that the only thing that isn’t scarce these days is us – humans. The world’s population is rising at 80 million per year.
That is the population of Germany – Europe’s most populous country. So every year there are 80 million more mouths to feed.
Not just that, but the type of food they want has changed. The Chinese and Indian middle classes – making up an estimated population of 200 million – have dramatically changed their diets in the past few years, demanding meat and dairy like never before.
This is the biggest change in global agriculture in a generation.
On its own, the change in global demand would increase the price of food worldwide, but what is also propelling the price of food and amplifying this demand shock is the fact that intensive production of food demands lots of petroleum-based fertiliser and huge amounts of diesel. Put simply, the world is eating fossil fuels!
Look at the chart (above right).This is the trajectory of commodity prices. While the peaks and troughs are the result of speculation, the upward movement is caused by these real factors.
So what has this to do with lovely Leitrim on a glorious spring day?
The first implication for Leitrim (or any county really) is that places where it is easy to farm will do exceedingly well, given the chance. In the future, agriculture will move from being a low-yielding pursuit where the return on equity was modest, to a high-yielding, profitable game where the return on equity will be considerably higher.
The policy implication of this is that it puts into question the EU’s ‘‘set aside’’ policies, where huge tracts of land in Ireland lie fallow and the farmers are paid not to farm. Can you imagine anything more ridiculous in a world facing food shortages than farmers in the part of the world that is climatically best placed to farm, being paid to do nothing?
In Ireland, unlike other parts of the world, grass for cattle farming is free. In the likes of Brazil, they have to pay for fertilisers to grow the grass, while over here it just grows.
Wouldn’t it be smarter to begin to increase agricultural production by deploying the resources we have in order to farm more intensively? If we increased investment rather than subsidising idleness, there could be an agricultural revolution in Ireland, with enormous positive implications for rural communities.
The other implication of the world’s Malthusian conundrum is that the shift to alternative energy will be accelerated.
As the price of oil rises, the opportunity cost of other energies, even if the initial outlay is expensive, will fall.
Even without greenhouse emission concerns and the imperative of carbon neutrality, the move to alternative fuels is unstoppable.
So what about the cost of this alternative energy? According to the Irish Academy of Engineering, the cheapest alternative and environmentally-friendly source of energy in Ireland is the biomass used in existing peat stations.
The next cheapest source is wind-farms on land, while – according to the Academy wave energy technology is still very expensive. Approximately one-third of Ireland’s wind energy capacity – current and future – is within 40kms of the Drumshanbo LABs site, so you can see why the Malthusian conundrum has clear implications for this part of the world.
Now let’s also consider biomass. If the land lies fallow, why not give it over to the plantation of willow, to fuel Bord na Mona’s power stations? Willow has a three-year renewable cycle, will grow in this area and Bord na Mona will guarantee a return to the farmer in advance, which they can then use as bank collateral to invest further. Every three years this cycle can be repeated.
It’s clear that the world is changing and the major shift in energy and food prices is positive for us, simply by virtue of our climate. Sometimes fate deals you a decent hand, it is up to us now to play it.
One wonders whether the fact it was said by David McWilliams now disqualifies it as a possiblity? Of course this country is a diamond – Just look at it from the air – That’s pure “green gold” but I have to say, not as green as it used to be? – Has anyone else noticed that? Anyway I digress. The facts to me that seem plainly criminal are; 1. We import our once commonly grown vegetables 2. We tolerate non-productive land and; 3. There does not yet exist a national plan to make us self sufficient in, if not an… Read more »
Well, our first step at bringing an improvement in the economic situation in this country, would be if we all got down off peak BS. Of course the people who followed David’s analysis down the years, were lucky that they were never climbed Peak BS to begin with. But there still is a massive intellectual battle to be resolved. Wind energy is a massive potential game changer in this country. But, I reckon that the centralized bureacratic enterprise that is the ESB is against wind energy, because it loses it’s monopolistic power in the market. There is a massive issue… Read more »
Canadian Election has just completed. For an interesting insight into how to better run a democracy, do some research to get details of the academic achievements of all the political leaders of the main parties in Canada. Harper, the next PM is an economist. The others have PhDs, and are university lecturers. And in serious universities. Basically, the leaders of the various parties are well trained, and well qualified for their responsibilities. And they have training in areas that is of relevance to the citizens. As far as I know none of them are small town solicitors who never practiced… Read more »
Maybe it is time for every community on this Island to set up their own Energy Co-op or ltd company, whatever…If we don’t take ownership of our wind, wave and other natural resources they will be taken by corporations and sold back to us as energy at a premium. That is, if we can afford their prices, otherwise it will be exported to UK/Europe. Our wind is no less valuable than the Corrib gas reserve. We are very likely to give it all away for free. Invest now in local energy projects!
As for the Malthusian thinking on population, I think that has been largely debunked, it is more a question about inequitable distribution of resources and the ludicrous concentration of wealth in the hands of a tiny minority which is detrimental to the great and struggling majority. Malthus was a market fundamentalist who believed in the power of the market to regulate human life, we in Ireland have seen firsthand the disastrous consequences of such ideology both historically (the Great Irish (and Indian) famine(s)) and in more contemporary times, so called ‘laissez faire’ or ‘light touch’ (no touch) regulation. Absent from… Read more »
‘a knot of old ladies ‘ – could we say the same for Irish Bankers as in ‘ a knot of Irish Bankers’ ?
subscribe.
I was in Amsterdam recently and as we are descending into Amsterdam, all I could see from the air between the coast and Amsterdam were buildings, green houses, concrete slabs, roads, canals and some greenery among all that. In fact the whole western part of Holland is like that. On descending back into Dublin, all you can see is the sea of course but once you go over land you see lots of green, (golf courses probably) and a few cows and sheep in big fields of green and hardly any trees. The differences are enormous. You’d wonder again and… Read more »
A good read that David, lots of great ideas there. There is a link between agriculture and energy that is worth mentioning explicitly: they are forms of land usage. There is a choice to be made about whether its better in certain circumstances to use land to produce energy directly (on-shore wind farms), to use it to create biomass to feed cars or power stations, or to use it to feed humans. We not only have a climate that allows all of these possibilities to be realistic options, but we have a low population density allowing us considerable flexibility in… Read more »
I think DmcW is not seeing the full picture here and the above therefore suffers from some inward contradictions. He mentions large tracts of land with farmers paid to let the land lie fallow. This is true. The world could produce vast volumes of food in excess of its current production levels. Ellen Brown nails the real problem here: http://bigozine2.com/feature/?p=539 “Some economists said the hikes were caused by increased demand by Chinese and Indian middle class population booms and the growing use of corn for ethanol. But according to Professor Jayati Ghosh of the Centre for Economic Studies in New… Read more »
David,
That’s all well and good, but when you actually get down to it, you’ll find there’ll be lots of problems, just like these selfish unreasonable unionised employees of Bord na Mona who are looking for payment of bonuses and overtime for work not done.
http://www.rte.ie/news/2010/0819/bordnamona.html
So, all these great ideas people have, well, they’re great, but worth sfa until we sort out these cossetted state sector shysters who demand more money for work not done.
Hi David, I agree with the points you have raised in this article. Agriculture and alternative energy are two great examples of sectors that Ireland should now focus on to lead the recovery. I would suggest that water is a resource that is also vital. In many areas of the world water supply shortages are a significant threat. Thanks to nature, we get enough of it in Ireland but our efficiency in utilising this valuable resource is shameful. We should focus on providing the water infrastructure needed to ensure that we can supply good quality water reliably and cost effectively… Read more »
Afternoon.
Thanks for the comments. Just getting through them. I realize I am no expert in the land, farming energy field, but when there appear to be megacycles ahead for food and energy, it would seem stupid not to grab this opportunity.
Best
David
Great writing David. Have you ever thought about writing novels and stories? The first part had me hooked and I thought I was in for a journey through rural Ireland of days gone by. The land is important and it is part of our psyche and everyone in Ireland should have access to a place to grow their own food. Doing so is healthy because the mind and the body benefits from the physical effort, fresh air and nutritious food. I am surprised you never mentioned GM crops as this the next thing in the pipeline. If Ireland was to… Read more »
A small Spanish island of 10,000 people is set to become first inhabited landmass in the world to become completely energy self-sufficient the same could happen here if there was the will to do so, remember the Spirit of Ireland project? http://www.spiritofireland.org
Spanish Island’s Quest to Be the Greenest Place on Earth http://t.co/q3A6veF via @TIME –
Yes, the Land is where it’s at, Land needs to be made available to more and more people for a Real sustainable solution, Real decentralisation needs to happen, Common sence needs to make a comeback. Ar ais go dti an tallamh…
[…] 0.75% Loss of faith in banks drives sale of home safes Ireland tops Greece with biggest deficit We must go back to the land Diehard risk-takers get back in the saddle Few mortgage brokers hopeful of recovery Irish […]
[ We must go back to the land ] the problem with agriculture is the level of work required. Whether it is Americans paying Mexicans to pick the fruit, or English farmers paying Poles to hoe the vegetables, everybody wants somebody else who is prepared to do the work. It is hard hard work. “Here lies Farmer Jack, who worked the land til it broke his back”. Same applies to Fishing. Acquaculture is another failed effort at realizing a massive production potential in Ireland. If you want to know the problem with acquaculture, go to the far South West and… Read more »
And if a significant land tax doesn’t also apply to rural land, David, the big speculative rent-seekers will be back into buying Irish farms, too.
After all the official denials are over….Portugual agrees to a bailout.
http://www.breakingnews.ie/world/portugal-becomes-third-eu-country-to-agree-bailout-503622.html
If the india, china and the likes are going to have such massive demands, all that’ll happen is that the mainland Europeans will take over this place and not trust the paddies to run it. The land will have everything exported off it and the paddies will pay top dollar or yuan or rupee for it. If we cannot control and take benefit from the billions of euro from the corrib gas line, what hope do we have of taking control of our land , our wind etc. Yes, there will be mega cycles. However, the irish will – as… Read more »
There is some great writing done on this site, including David’s of course. It should be preserved for posterity. I just wish more people would listen, learn and implement the myriad good ideas and suggestions that emanate from here.
The destruction of the Irish economy
via Prof. :) Gurdgiev
http://www.scribd.com/doc/50015511/The-Destruction-of-the-Irish-Economy-by-Jeremy-James
Policy and Choice…. free download
Via Liam Delaney
Policy and Choice
Public Finance through the Lens of Behavioral Economics
William J. Congdon, Jeffrey R. Kling and Sendhil Mullainathan, Brookings Institution Press 2011 c. 247pp.
http://www.brookings.edu/press/Books/2011/policyandchoice.aspx
Does anyone know can this type of Willow grow on bogs. I see where it is being planted on good farmland and it seems a waste that we are importing so much food which could be grown there. Also does Willow exaust land, (this is an effect where the topsoil loases nutrition and becoms like yellow sub soil?)
Also just wondering is the banning of the small timw turf cutter realy about big bussiness & their puppet governments wanting to manopolise the biomas energy longterm?
!!!RTE BREAKING NEWS!!!!
WAR BETWEEN IRELAND AND GERMANY OFFICIAL
In a first strike scenario Ireland attacked Germany with weapons of mass stupefying, while this is not a first in modern warfare, never before in history has a strike on such a scale been undertaken, it is beyond anything wepons manufacturers could dream of today, the total output will effect approximately 50-60 million Germans within 2-3 days after the hit.
It is not clear whether a military counter attack can be accomplished by german defense forces anymore, so severe are the damage projections.
Jedward left for Berlin.
Hmm, David the grass grows with out any input or attention? You most wear rose-tinted glasses…If oil increases as it will no doubt who can afford the shipment cost to Asia? The new holy grail of paddy land we will sell them milk they can not digest! surly we will supply them with a remedy from Rinaskiddy… Lads get it, growth is a myth and if we follow this path, we end up, as David showed once, on one of his TV programs, like the Maya’s but does David remember this???? Or is he playing tunes according who feeds him??… Read more »
Fair good article David, miles better than that Royal London Trash you wrote last week.
Agri and energy are very capital intensive and we can see that there is very little capital about the place. In fact capital is leaving the country, not being invested here. If I were investing the last place I would invest is in Ireland. Even our minister of finance invests his savings outside Ireland. Allocation of capital is a major economic driver, we have all seen the massive allocation into property over the last 20 years and for the next 20 years most capital will go on servicing property debt in one form or another. Return on capital in the… Read more »
I think Elfielf & Paddyjones are spot on. We are forgetting about logistics (owned anyway by non Irish and fossil fuel dependant – so there goes your margin) and the lactose intolerance of Asians. We are also underestimating just how good and ingenious the asians are in farming. If Ireland is to survive it has to grow both from within and deliver on exports which are light to zero weight. Oh dear! Knowledge economy strikes again! There are 4 areas of growth 1)Knowledge Industry from Software to Pharma to Finance and very hi value lightweight industries. 2)Wind for energy export… Read more »
After Fukushima…. EU Lies and corrupted Stresstests on EU Nuclear Power plants!</b I thought this is an essential thing for everyone to understand, and somehow, it is of course directly linked to economical power dynamics, hence worth enough to post on davids economy site. We know how the very meaning of stress tests can be described as dependent on the lobbies Interests behind the very industry that has to undergo a stress test, right? Banking Stress test, you remember the farce. Here is another act from the theater of EU dimwits and corrupted politicians that is stereotype for a dysfunctional… Read more »
Prof. Charles W. Calomiris slides
via Karl Whelan
Charles Calomiris:
http://www.voxeu.org/index.php?q=node/738
His slides:
http://www.eui.eu/Documents/DepartmentsCentres/Economics/Researchandteaching/Conferences/LifeintheEurozone/Florence2011Calomiris.pdf
You could not nail it any better, although I would most definitely take the brackets and questionsmark on ECB :
These countries’ leaders (and ECB?) reputedly apply pressure to kick the can down the road for their banks (and themselves) at the expense of Spain and Ireland.
These countries refer to the owners of debts, Germany holds 12% of their GDP in Ireland and Spain.
Euro was invented to try to force political union, end conflict (Kohl’s dream), but its denouement is having the opposite effect.
+1
Morning,
If we are in an agricultural and energy megacycle based on demand and diminishing supply, how should we react? This is the question. I don’t have the answers, and some of my views appear contradictory, for example I believe cities are a force for human creativity – having read Jane Jacobs many years ago, I remain convinced of her position on cities. As for rural Ireland, there appears to be a great opportunity, maybe the Irish problem is logistical, but surely we can overcome this.
Best,
David
As I went looking for a mail from last year I came across this quote here:
THOUGHTS ON GROWTH
Every increment of added population and every added increment of affluence
invariably destroy increments of the remaining environment.
Population growth and increases in affluence make it impossible
for reasonable increments of improved efficiency in the use of resources
to enhance or to preserve the environment.
You cannot preserve the environment by accepting the population growth
and the increased affluence that are now destroying the environment.
– Albert A. Bartlett; Professor Emeritus of Physics –
Adopting Deco’s term…DIMWITS…. bloody fucking Hell…. :(
http://namawinelake.wordpress.com/2011/05/04/nama-report-and-accounts-for-q4-2010-published-to-the-oireachtas/
I think eugenics was tried in German ovens and we agree it didn’t work. As a pacifist, I don’t think the world is made safer with capital punishment, Obama assassination squads, shoot to kill, water boarding, wars eg IRAq, Afghanistan, injustice, or the manipulation of world food supplies through financial instruments manipulating commodity prices causing death to millions in the third world. Take care of humans and the environment will become safe even taking care of itself:) Disagree with Bartlett above, its not population growth that is the problem, but destructive actions by individuals that give rise to unhealthy populations… Read more »
Osama’s Purse
Why did Osama hold €500 instead of $500 does he have more confidence in the Euro?
David, I have already commented on this aspect – more than two years ago – when Mary Coghlan (representing 3% of GNP) was sent to speak for Ireland at an International Conference. Holland, with a land mass the size of Munster, 50% of which is below sea level, supports a population of almost 17 million. Its House of Representative (Dail) has 161 deputies – 1 per 100,000. One of its principal exports is Agricultural produce, including flowers. Need more be said? We keep looking to Brussels & to the USA. Forget it. Brussels wants our money (or anybody’s to fund… Read more »
[…] 0.75% Loss of faith in banks drives sale of home safes Ireland tops Greece with biggest deficit We must go back to the land Diehard risk-takers get back in the saddle Few mortgage brokers hopeful of recovery Irish […]