Farm Ireland

Tuesday 12 December 2017

Mixed blessings as farm incomes rocket

Tale of two halves as dairy and tillage boom while drystock lags

Caitriona Murphy

Caitriona Murphy

Family farm incomes increased by 48pc last year to an average of €18,000, the Teagasc National Farm Survey 2010 has revealed.

However, the huge jump was only enough to bring farm incomes back in line with the levels recorded in 2008, according to Teagasc analysts.

Despite the surge in profitability, the farm advisory body says that almost 40pc of farm households still fall into an economically "vulnerable" category.

Dairy and tillage farms led the agricultural recovery from a disastrous 2009. Dairy family farm income (FFI) almost doubled to €47,171 last year, while tillage farms recorded a 119pc increase to €33,381.

Dairy farmers were boosted by a rise of almost 30pc in milk price last year, which, when coupled with only modest cost increases, delivered big income gains. This income boost has attracted a record number of new entrants into dairying this year, with the latest Department of Agriculture figures showing a massive surge in new entrant quota applications from 111 last year to 263 this year.

However, the average income of €18,000 conceals the mixed fates of the various farming sectors, with Ireland's drystock farmers continuing to make a loss last year before direct payments were received. These payments contributed more than 50pc of total farm gross output on these farms.

When direct payments were included, FFI on cattle-rearing farms increased by 7pc to €7,013 and by 8pc to €11,586 on sheep farms. Average income on the 30,000 more commercial, full-time farms was considerably higher than the national average at about €43,000 last year.

The fact that income on full-time farms increased by a staggering 80pc last year, from €23,832 to €42,829, only serves to highlight the abyss they had fallen into in 2009.

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The National Farm Survey also confirmed that farmers fell victim to the nationwide recession last year as the number of farm households with off-farm income declined.

For the first time since 2003, the number of farm households where the farmer or spouse works off the farm fell to less than 50pc.

"This decline in off-farm employment has serious implications for farm households," warned Teagasc analysts Thia Henessey and Brian Moran, who pointed out that thousands of Irish farms were only being sustained by off-farm jobs.

Meanwhile, the analysts explained that National Farm Survey income figures differed from Department of Agriculture figures (see page 2) because the Teagasc figures included single farm payments due last year but not paid until early this year because of mapping delays and the cost of land rental.

Commenting on the survey, the IFA said that increasing price volatility caused by greater exposure to the global market underlined the importance of the single farm payment as a tool to underpin primary production.

"Family farms cannot survive severe boom-bust cycles without the certainty provided by the EU Common Agricultural Policy", said IFA president John Bryan.

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