'Economic recovery is a mirage for me and my farming family'
Q My wife and I have been farming since we got married almost 10 years ago. We have three young children and at present we are scraping by on the small income the farm is making. We are facing the reality that it is not practical for my wife to return to work off-farm as the childcare costs would wipe out any income she would make. I keep hearing about the economy improving but we are finding the reality is very different. What can we do?
A As the economy returns to roaring health for some, it is important to remember that the rising tide has not risen all boats.
The latest Teagasc figures estimate average farm income in 2017 to be €12,680 in the case of suckler farms and €17,000 on sheep farms. With the average industrial wage sitting at €37,000, it is clear that for many farmers survival without an off-farm income will not be possible.
Borrowings and debt
Like any business a farm is likely to be carrying debts and borrowings at some level. In bad years it is essential to manage these as they can end up costing a lot just in interest. Average interest rates for existing lending are between 4-4.5pc, while interest rates on new borrowings sit above 5pc in many cases. If you are carrying significant borrowings you should shop around for the better interest rates and consolidate borrowings if necessary.
Also, watch for new schemes like the agri cashflow loan which came on stream in early 2017 and had an interest rate of 2.95pc. It could help keep down the cost of new finance and even assist with existing expensive borrowings.
Despite an overall increase in Direct Payments to the sector which contributed to the overall slightly positive outcome at national level in 2016, the picture at individual farm level varied significantly, depending on participation in farm schemes, and the redistribution of the Basic Payment that is ongoing.
However, if your farm was not eligible to take up some of the new measures which would have brought about an increased direct payment - eg young farmer top-up - you may not have benefited in any way.
Every farmer should be considering the financial benefits that taking part in new schemes may bring. Look at options like the Beef Data Genomics Scheme and Knowledge Transfer Scheme, which may present extra income opportunities.