The Irish Hardy Nursery Stock Industry: Recent Trends and Competitive Position.

End of Project ReportTh Irish Hardy Nursery Stock (HNS) industry has grown considerably in recent times. For the industry to maintain this level of growth it must remain competitive, particularly relative to the UK and the Netherlands, Ireland\u27s main trading partners for HNS. Consequently, the objectives of this research were to (i) establish the size and value of the Irish HNS industry in 1999/2000, and (ii) examine the relative competitiveness of the Irish HNS industry, using profitability and value as indicators of competitiveness. A census of the Irish HNS industry was carried out between September 2000 and June 2001 to establish the size and value of the industry. The results of the census showed that the net value of plants produced on Irish nurseries amounted to €30.6m in 1999, an increase of €6.8m from €23.4m at the last census in 1996. In the same period the total area devoted to HNS production also increased from 391 ha in 1997 to 465ha in 1999. Kildare remains the most important county in the industry in terms of value because of the large area devoted to outdoor containerised production and production under protection. In terms of competitiveness, unpaid labour (imputed) had a significant effect on profitability levels for the three countries. When an imputed charge for unpaid labour was included in the analysis, the UK and Ireland had relatively higher Net Nursery Income (NNI) than the Netherlands. However, when the imputed charge for unpaid labour was excluded from the analysis, Ireland and the Netherlands had relatively higher NNI values than the UK. Firm size and mechanisation levels, were examined as possible sources of inter-firm variations in costs of production and profits. Economies of scale appeared to be evident as nursery size increased from `small\u27 to `medium\u27 and dissipated as nursery size increased from `medium\u27 to `large\u27. This indicated that the minimum economic size for HNS production appeared to be relatively low. Based on the observed relationship between labour productivity and mechanisation levels, it is possible to infer that future mechanisation of the Irish industry may provide a partial solution to labour availability problems. Although the Irish HNS industry showed a competitive cost advantage, the low added value content of the Irish product is not a reassuring sign for the industry. The research revealed that the competitive potential of the industry in the Netherlands, based on relative value-added properties, was ahead of the Irish and UK industries. However, the Netherlands has not fully succeeded in converting this potential into competitive performance in the Irish market for HNS. The Irish HNS industry remains the largest supplier of HNS to the domestic market, although HNS available from the Netherlands was seen as given better value. In order for the Irish industry to remain competitive in the future the competitive strategies which the industry adopts must be re-evaluated. Distinct market segments were observed in the Irish market, which offers potential for a focused competitive strategy, which may suit smaller specialist producers. The critical buying criteria identified and subsequent relative performance of the Irish industry should provide the information, which is required for a competitive strategy of differentiation