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Independent.ie

Thursday 8 December 2016

Time for some tough calls on farm incomes

Mike Brady

Published 10/02/2016 | 02:30

The National Farm Survey highlights the consistently poor profitability of beef and sheep enterprises.
The National Farm Survey highlights the consistently poor profitability of beef and sheep enterprises.

Where do we want Irish farming to be in 2025 and beyond? I suggest the following would be a good basis to plan for the benefit of farmers, industry, consumers and government.

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The National Farm Survey (NFS) in 2014 shows an average annual farm income of €26,642 and 51pcof households had an off-farm income.

Average farm incomes are projected to fall to €24,000 in 2015.

This level of income is simply not conducive to attracting quality young people into the farming side of agriculture. I suggest a target of €50,000 average farm income is set for 2025, but how can this target be achieved?

For a start, real leadership is required as the proposed changes may not be palatable to all. Increasing average farm income will involve:

increasing farm size/have fewer farmers

changing the mix of farm enterprises

improving enterprise productivity.

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The simplest and easiest way to boost family farm income is to increase farm size and reduce the number of farmers. In 2014, 23pc of farmers produced an income of less than €5,000 while 5pc earned more than €100,000. These figures need to be flipped.

The long term leasing of land taxation benefits and promotion of registered partnerships are a step in the right direction but there is a crying need for an attractive retirement scheme to boost the uptake of these schemes. Elderly or unprofitable farmers should be allowed to exit farming with dignity and their progressive neighbouring farmers allowed the opportunity to farm such land in a more productive manner in a mutually beneficial arrangement.

The National Farm Survey highlights the consistently poor profitability of beef and sheep enterprises. If we take the country as one big farm what is the best enterprise mix for Irish farming?

Perhaps increasing dairy and forestry at the expense of beef and sheep is not as outrageous a proposition as some might suggest.

In any case, it serves to highlight how important it is to focus on improving the productivity and profitability of beef and sheep enterprises. The research and advisory bodies are critical to this plan.

Increasing subsidies or direct payments is a hot potato for our political and industry leaders. The next EU CAP reform will be the playing pitch for this game with the 2020-2024 reform just around the corner.

We are constrained by EU rules on the redistribution of CAP funds but it should be more than just a reshuffle of the cards next time round.

We must get away from the situation where farmers in the western, border and midlands regions are pitched against the farmers in the south and east claiming they should get a bigger slice of the pie due to poorer land quality and other disadvantages.

The sensible approach is to direct payments to those who are producing the food and meeting EU traceability, biosecurity and environmental standards. If this means a disproportionate amount of Basic Payment Scheme (BPS) and Area of Natural Constraint (ANC) Areas money flows out of the western, border and midland regions so be it.

To compensate there should be more targeted agri-environment, tourism and forestry schemes run to support farmers who wish to switch from unprofitable beef and sheep enterprises on poor land.

Social protection payments should also be an option for farmers struggling to make ends meet on marginal land.

We are a food exporting nation with many natural advantages but we must produce this food in an environmentally sustainable matter if we are to retain our competitive advantage in international markets. Again the research and advisory bodies are critical to this plan.

When the canvassers for the general election and the IFA presidency call to your door in the coming weeks, ask them what is their vision for the agricultural and food industry in 2025 and then make up your mind if the answer is a soundbite or a well thought out plan.

Mike Brady is an agricultural consultant and managing director at Brady Group agricultural consultants and land agents email: mike@bradygroup.ie

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