The highest annual level of investment ever recorded on Irish farms occurred in 2007. Gross on-farm investment increased by a massive 76% and amounted to an estimated €1.4 billion nationally. The average gross investment on the farms that did invest in 2007 was €21,000, amounting to 80% of their farm income. Dairy farms accounted for almost half of this investment.
Commenting on the results, Liam Connolly head of the National Farm Survey team said; “The two main highlights of the 2007 results were the sizeable increase in dairy and tillage farmer’s incomes and secondly the phenomenal level of on-farm investment at €1.4 billion.”
The largest increase occurred on the more commercial, full time farms. Incomes and output were much higher in 2007, averaging €43,900 compared to €34,500 in 2006 – an increase of 27%. There are 36,400 farmers in this group, and they are the key performers in Irish agriculture. Incomes for these commercial farmers ranged from €66,000 per farm on tillage farms, to €53,800 on specialist dairy farms and €17,700 on suckler farms. Direct payments were less important on full-time farms contributing 23% of gross output and 62% of farm income.
Dairying and tillage continued to be the most profitable farm enterprises with average farm incomes of €51,017 on dairy farms and €40,611 on tillage farms in 2007. Cattle and sheep farms are predominantly part-time, having low farm incomes, and a high dependency on subsidies and off-farm employment. Incomes on sheep farms declined by 10% in 2007 to €10,682 per farm due solely to lower revenue from sheep sales.
The low level of income on suckler farms highlights the vulnerability of the sector to any potential downward price pressure that may arise from change in market access as part of any WTO agreement. Average farm incomes on suckler farms declined from €8,291 in 2006 to €7,702 in 2007 – a decline of 7%, due mainly to higher costs. Market based output from suckler systems, which account for almost one quarter of all farms in the country, was €12,755 per farm, whilst total production costs were €17,816, resulting in a loss from the market place of €5,061.
Other key findings of the survey include:-
- The gap between incomes on dairy and tillage farms versus drystock farms continues to widen.
- The contribution of subsidies to output and income declined in 2007.
- Overall on 80% of farms the farmer and/or spouse had some other source of off-farm income.
- Income on drystock REPS farms was considerably higher than that of Non-REPS drystock farms.