A 2005 Agriculture-Food SAM (AgriFood-SAM) for Ireland

This paper describes the construction of a social accounting matrix with disaggregated agricultural and food industry sectors for Ireland for the purpose of agri-food policy simulations. The base year for the AgriFood–SAM is 2005 and it draws on a recently constructed 2005 SAM for Ireland (Miller et al., 2011). Its unique features include a high level of disaggregation of the agricultural and food industry sectors as well as the integration of individual household data for the purposes of micro-simulation analysis. The AgriFood–SAM documented here can be used as a tool to analyse the intersectoral linkages between the agri-food sectors and the Irish economy. Multiplier effects for exogenous changes in final demand for different agri-food activities are presented. This paper also presents the economic impact of reducing GHG emissions from the agricultural sectors by 20%, using a SAM multiplier analysis. The linear SAM model is based on the Leontief model, but as it incorporates income generation and distribution as well as the production side, it captures the complete circular flow of the economy. The results suggest that a 20% reduction in GHG emission by 2020 will have a contractionary effect in the whole economy. This policy will reduce the total gross output in the economy by more than half a billion euro and have an indirect effect on the household by reducing its total income with more than €200 million. In interpreting the results form a multiplier analysis we should be careful as the model assumes fixed proportion production functions, fixed prices and free availability of resources. In other words if cattle output reduces by 12.6% in 2020 then the level of inputs used in by this sectors is assumed to be reduced by same percentage. Similarly employment and income are assumed to be reduced in the same proportions. Also, multipliers are based on the state of technology within a sector at a point in time. Hence, multipliers may change in different sectors over time as technology changes.