The past 10 years has perhaps been one of the most astonishing decades in history – from an economist’s perspective anyway.
When we think back to April 2008, Amazon was still seen as a niche bookseller, Facebook was a corporate minnow and we went to Xtra-vision for movies.
Ten years ago today heralded the start of the ‘credit crunch’. The term which was unfamiliar to most people entered dictionaries in 2008. A credit crunch refers to the sudden reduction in the availability of credit or a sudden tightening in the conditions to obtain credit. In short, the availability of credit decreased sharply and the cost of credit increased significantly. In turn, this morphed into the global financial crisis or GFC and was accompanied by a global downturn. The rest they say is history. A decade has passed and hundreds of books have been written about the credit crunch and the global financial crisis that followed.
In recent years, Northern Ireland’s agriculture sector had been outperforming all other sectors. After the Credit Crunch, whilst other sectors of the economy such as construction and manufacturing were struggling badly, the agri-food sector was in rude health, benefiting from favourable exchange rates as well as strong global demand. However over the last year, agriculture has been enduring a torrid time; indeed the most challenging conditions of all sectors. Total Income from Farming (TIFF) for instance is down 42 percent year on year and is now at its lowest level since 2006. Furthermore, TIFF is now almost 20 percent below the average of the last twenty years after accounting for inflation. Last year’s fall represented the steepest drop in farming incomes since the BSE crisis in 1998 (-56%).