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Independent.ie

Sunday 4 December 2016

Farmgate sales top €6bn in bumper year

CSO figures show incomes are 60pc higher than two years ago

Published 21/12/2011 | 06:00

Farmgate sales topped €6bn for the first time ever this year.

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Provisional figures from the Central Statistics Office (CSO) mean that farm incomes are now a full 60pc higher than they were two years ago.

The bumper year saw output jump by more than €861m (16pc) as all sectors saw big increases.

The biggest hike was in cereal sales, which increased by more than 50pc.

However, the two key sectors of beef and dairy also saw rises of 17pc and 20pc respectively.

And despite input costs also lifting by 12pc during the year, the CSO estimated that the operating surplus on farms increased by a whopping 33pc to €2.6bn.

This hike in profitability comes on the back of a 27pc increase last year.

However, the IFA was quick to point out that the farm income figure included all EU and subsidy payments received by farmers in the past year, despite the fact that €150m of this €1.9bn included delayed payments carried over from last year. If this is factored out of the calculation, the increase in farm incomes comes in at 27pc higher than 12 months ago.

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In addition, the operating surplus or farm income figure does not include costs such as land rental or loan interest payments. When these figures are included, the total farm income figure is reduced by €450m to €2.2bn.

But there is no denying that the figures point to a vintage year for Irish farmers. The last time their farm income figure was as high was in 2005. The key difference between then and now is that input costs have increased by more than 25pc, or nearly €1bn.

However, record yields and good animal performance have lifted sales to new record highs of €6.19bn to keep the balance of trade in the farmer's favour.

The biggest increase in costs was in feeding stuffs, which increased by 22pc to €1.27bn. Silage and hay costs were also up by 19pc, representing a bigger hike than that recorded for fertiliser, energy or fuel costs.

Reacting to the CSO's initial Agricultural Income estimates, IFA president John Bryan said the figures showed the continuing positive growth of the primary agriculture sector.

"However, it must be remembered that average farm incomes in 2011 will still be only around €23,000," cautioned Mr Bryan.

Last year, the equivalent figure was €18,000.

"Direct Payments represented over 70pc of farm incomes in 2011," he added.

"This highlights the importance of retaining the Single Farm Payment and rural development programmes in the CAP to underpin farm incomes, production and agri-food output."

Meanwhile, the ICMSA's Ciaran Dolan said that the income figures for farmers merely showed a restoration to the levels applying before the catastrophe of 2009 and he said they further highlighted the volatility that was increasingly likely to become the norm.

"The income figures for farmers show a return to those levels that applied between 2005 and 2007," Mr Dolan said.

"Farmers' incomes have not actually grown at all over a five-year period; they have merely been restored to the levels seen at the beginning of that period.

"Farmer incomes dropped off a cliff in 2009 when farmers, specifically dairy farmers, produced milk for the whole year on a below-the-cost-of-production basis."

Gabriel Gilmartin, the national president of the Irish Cattle and Sheep Farmers' Association, said that while he was pleased with the increased farm income figures from the CSO, escalating input costs remained a worrying trend.

However, he said it was encouraging to see that agriculture was the one area where growth was being registered in the economy.

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