IFA calls for aids as incomes set to fall
THERE have been strong calls for new farm investment incentives in the forthcoming Budget following news that farmers face a slump in income this year, writes Michael Hegarty.
New IFA estimates for 1997 point to a 5pc-6pc drop in average farm income, despite the boom in the overall economy which should result in 7pc national growth for the year.
IFA president John Donnelly said the farming community now needs ``stronger incentives for investment'' through the taxation code and farm development grants.
``These measures are necessary to restore farm incomes and maintain the vital contribution of agriculture to the economy,'' he said.
The IFA now wants 80pc of the beef premia paid up-front and for all direct payments to be paid on time to improve farm cash flow and allow for repayment of borrowed capital.
Average cattle prices have fallen by 4pc this year due to continuing market access problems. This is on top of a 14pc fall last year from the BSE crisis.
Milk prices are down by 8pc-9pc, due mainly to currency revaluation. Pigmeat prices fell by a similar amount, although volumes have risen by close to 7pc.
Cereal prices have dropped by almost 20pc this year and have fallen by about 30pc in two years. Poor harvest conditions have added to grain growers woes.
The single greatest problem this year has been the over-valuation of the pound, John Donnelly said. About half the price loss has been offset by temporary EU compensation, but this will be quickly phased out over the next two years.
IFA economist Con Lucey said that without the 8pc drop in purchased feed and fertiliser, the net £50m increase in direct payments and the bigger uptake of REPS this year, the farm income decline would have been worse.
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