Farm Ireland
Independent.ie

Tuesday 20 November 2018

In for the long haul: Small farmers are determined to remain on the land despite falling incomes

 

Only 15pc of small farmers would consider leasing their land
Only 15pc of small farmers would consider leasing their land

Thia Hennessy

The economic trends are stacked against them, but Ireland's 50,000 small farmers are determined to remain on the land.

A new study from Teagasc has found that just 15pc of small farmers would consider leasing land and only 4pc are looking at forestry as an alternative to livestock.

The Teagasc research provides a detailed picture of the economic, social and environmental performance of small holdings.

Farms are classified as small if they have very low levels of agricultural activity, such as 14 suckler cows or less.

These small farms are not normally represented by the Teagasc National Farm Survey in its annual income report, so little is known about the circumstances of these farms.

Although over one-third of all farms in Ireland or 50,000 farms are classified as small, they have a low intensity of production and collectively contribute less than 5pc of all agricultural output in the State.

Despite this, they occupy 16pc of the total farmland area of the country with two-thirds of them situated in the Border, Midland and West regions. As small farms receive over €200m each year from the Basic Payment Scheme there is an ongoing debate about the future of these farms and the role they play in the rural economy.

In 2015 small farms, with an average farm size of 14 hectares (35ac), typically earned farm incomes of less than €3,000 and were predominately involved in cattle and sheep production.

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However, the typical small farm is operated with less than half a labour unit and 38pc of operators of small farms also have an off-farm job and a further 39pc supplement the low farm income with pensions.

Farmers on small holdings are typically older and are more likely to be living alone than farmers generally.

In summary the survey paints quite a bleak picture of the economic situation on these farms with just 16pc being classified as economically viable businesses and up to half of them being in an economically vulnerable position, that is the farm business is not viable and neither the farmer nor spouse work elsewhere.

It is well understood from the Teagasc National Farm Survey that cattle and sheep farms are very reliant on direct payments.

This reliance is even more pronounced on small farms.

In 2015 the typical suckler cow farmer made a market loss of about €10 per hectare, in other words when all of the costs of production were paid out of the price received there was a loss of €10 before direct payments were received.

The equivalent figure for small suckler farmers in 2015 was a market loss of €150 per hectare. In other words those farmers would have been better off by €150 per hectare had they not engaged in production at all. Clearly the economic situation on these farms is challenging.

The story is more positive when the environmental performance is considered. Typically small farms do not produce high levels of greenhouse gas emissions, a major contributor to climate change, or nitrogen surpluses which impact negatively on water quality.

However, given their low levels of output their environmental performance is not as positive when considered per unit of output basis. In other words small farms emit more greenhouse gases per kilogram of meat produced than larger farms. The low intensity of these farms also mean that they are important providers of other "public goods" such as landscape management and biodiversity.

The social analysis in the survey is particularly interesting.

The survey found that small farmers in general are at risk of isolation but older farmers in particular often go a week without meeting someone outside of their home. Accessing services is also a problem. Older farmers in particular have difficulty with accessing public transport, medical services and a garda station.

The impact of declining access to garda stations was also being felt on the ground. Up to 55pc of all small farms said that their sense of security in their own homes had deteriorated in the last five years and almost one in five older farmers said it had deteriorated considerably.

Given the low levels of economic and social sustainability in these small farm households one would expect that a major change is about to occur, that these farms will cease to exist, more of them will go part-time or they will diversify.

However, the study concludes that little change is expected. Just 15pc of them would consider leasing their land out to another farmer.

Of those that are not already working off the farm just 7pc of them are looking for employment, albeit age may be a limiting factor for many. And just 4pc of them would consider planting forestry as a viable alternative to cattle and sheep farms.

Clearly these small farms plan to continue in production and for many this is good news. The social and economic presence that these farmers provide in rural areas that are often bereft of other economic activity is essential. The upcoming CAP reform and the future of direct payments will be the ultimate deciding factor in the long-term sustainability of this group.

Thia Hennessy is Professor and Head of Food Business and Development at University College Cork. Emma Dillon and Brian Moran, authors of the report, are with the Teagasc National Farm Survey


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