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DUBLIN (Reuters) - After the Celtic Tiger died, Anthony Slattery quit his job as an accountant and bought some cows.
With food and drinks exports rising by close to a billion euros a year and food firms among the best performers on Ireland's bruised stock market, agriculture beckoned as one of the few sectors to survive a devastating property collapse.
"A few years ago people thought you were insane if you went into farming," said Slattery, 25, who quit a leading international accountancy firm to spend seven days a week milking cows on his farm in the midlands. "Now there's definitely money to be made."
The government has climbed on the bandwagon, citing food and agriculture as a route back to growth and the key to extracting some value from the vast land holdings left in state hands after Dublin was forced to take over banks' risky development loans.
Experts warn expectations have become inflated, however, and with incomes in the sector highly dependent on both EU subsidies and international commodity prices, and exports skewed towards struggling European markets, it could yet suffer its own shock.
Food and agriculture struggled to attract the interest of investors during the Celtic Tiger decade to 2007 as high-tech and pharmaceutical multinationals, and later construction firms and banks, drove GDP growth of up to 7 percent per year.
With tens of millions of euros to be made filling fields with duplex apartments, banks had little time for farmers upgrading their milking equipment.
But after the property bubble burst, bringing much of the economy down with it, the food sector was suddenly the safest bet in town.
"Multinational investment was the sexy thing in the 90s; in the 2000s, it was construction and financial services," said Jim Power, chief economist at financial firm Friends First. "Now everyone is sitting up and taking notice of the agri-food sector."
While home-buyers and small businesses found it all but impossible to get credit this summer, leading lender Bank of Ireland boasted it was approving 85 percent of loan applications in agriculture, fishing and forestry.
Equities investors are equally enthused, driving food stocks higher and more than doubling the share of the food and drink sector in the Irish market to more than 20 percent, from under 10 percent at the height of the boom, when banks dominated.
In speech after speech, Ireland's leaders laud the sector as key to the country's recovery. The point out food and drink exports have played a key role in the balance of payments surplus that has fuelled optimism in recent months that Ireland may be the best-placed of Europe's peripheral economies to export its way out of debt.
Unlike the pharmaceutical and high-tech multinationals that have set up in Ireland to take advantage of tax breaks, who repatriate much of their profits to corporate headquarters abroad, agri-food tends to be produced by indigenous companies, and most of the money stays in Ireland.
"The agri-food sector is worth around 24 billion euros, but about 22 billion of that actually stays in the Irish economy, which is an extraordinary figure," said Agriculture Minister Simon Coveney.
Half of all exports by indigenous companies are in the sector, he said.
The government expects agri-business exports to grow to 12 billion by 2020 from 8 billion last year, with two thirds of the increase from food processing and one-third from commodities.
Part of the growth will come from commodity price increasing and phasing out production caps on dairy products, which the industry believes could boost dairy exports by 40 percent, or up to 800 million euros.
The government is also encouraging farmers to switch to higher value commodities, to invest to boost productivity and to look at high-value artisanal food products.
But before policymakers get too excited they should remember that even if the strategy succeeds, agriculture would likely amount to no more than 10 percent of annual economic output, up from under 7.5 percent today, economist Jim Power said.
An additional 40,000 jobs would mean one in ten would work in the sector, from one in twelve today.
"It will be one of the stronger growth areas, but it is not going to result in a GDP bonanza," said Power. "It's not going to drive a new Celtic Tiger."
The wider domestic economy must recover if Ireland is going to see the growth rates necessary to make its debt sustainable. Exports have offset domestic weakness, but economists warn a global slowdown may dampen the effect in the coming year.
The agriculture and food sector is actually experiencing two separate booms -- local farmers are enjoying bumper earnings as milk and meat prices soar and a vanguard of Irish food companies are chalking up strong profits in niche global markets.
There is some overlap, but the fate of the farmers and the multinationals who have spread their tentacles around the globe over recent decades may be very different.
Ireland's booming agri-business companies have used technology and diversification across global markets to reduce their reliance on fickle commodity markets and are forecasting strong earnings in the coming years.
The top market performer in recent years has been Glanbia, whose stock price has grown 130 percent in the past three years to lift its market capitalization to 1.3 billion euros, while the broader Irish market is up 5 percent.
Originally a dairy co-op, it diversified first into consumer foods and then nutritional ingredients and is now one of the world's largest producers of protein-based nutritional products for body-builders.
Its larger rival Kerry Group, up 95 percent in the same period, has become one of the world's largest ingredients and flavorings companies, with manufacturing operations in 23 countries, including India, Brazil and China.
After beginning life as a dairy processing enterprise in the West of Ireland in 1972, Kerry now has a market capitalization of 4.7 billion euros and makes flavorings for noodles in Indonesia and hickory smoke flavorings in Tennessee.
It says it expects to maintain average earnings per share growth at over 10 percent a year, which it has managed since 1986.
"These companies have outgrown the local market over the last 20 years," said Liam Igoe, an analyst with Goodbody stockbrokers in Dublin. "People have stood up and noticed because they've had good earnings growth against a very difficult international economic environment."
Their exposure to fast-growing emerging markets combined with their ability to manage commodity prices provides significant room for growth, said Noel O'Halloran, chief investment officer at Kleinwort Benson Investors in Dublin, which manages approximately $5 billion in assets.
"I'd be positive about the outlook," he said. "They are not just doing well because everything else is doing badly."
While Ireland's food multinationals have grown and diversified, local farmers remain heavily dependent on commodity prices and have had limited success in moving up the value chain, despite a mini-boom in the number of artisanal producers selling at weekly markets in Dublin.
"There are some farmhouse cheeses and organic yoghurts, but there is not a huge amount happening," said Clemens Von Ow, who recently took over a cereals farm from his German parents in the Irish midlands.
"Farmers here have been very weak at vision and marketing."
For the moment, dependence on commodity prices is not a problem, and farmers joke that girls have started talking to them again at rural discos.
Beef prices at Irish plants hit a record 4 euros a kilo in recent weeks and a 30 percent increase in milk prices helped push the average dairy farmer's annual income by 81 percent to 44,400 euros in 2010.
But commodity prices have fluctuated wildly in the past, as in 2008 when some milk prices fell by over 50 percent.
The other important factor is subsidies, mostly from the European Union, which aim to support those who want to farm a reasonable standard of living as well as preserve a rural way of life.
Even with the high prices, farmers' net incomes last year were roughly equivalent to subsidies received, meaning they would just be breaking even without support, according to a recent report by the Agriculture and Food Development Authority.
For all the government support and recent financial gains, farming remains a hard and largely unappreciated profession.
While exam scores needed to secure a place in the agriculture course at Dublin's largest university have soared, for example, the scores needed for medicine and finance are still much higher.
Farm incomes also remain lower than other sectors and half of all farms remain dependent on income from beyond the fields.
After milking his cows on a recent evening, Slattery admitted he was planning to do some part-time accountancy to ensure his financial stability once his farm is up and running.
Things are going well, he said, but you never know.
"In 25 years I can't remember it ever going as well, but I don't want call it a boom," he said. With all the country has been through lately, "that has bad connotations in Ireland."
Editing by Sonya Hepinstall