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News : Irish Economy Last Updated: Jan 3, 2011 - 6:50 AM


Irish State Secret!: Ireland's farm incomes rose a stunning 39.1% in 2010
By Michael Hennigan, Founder and Editor of Finfacts
Dec 25, 2010 - 9:31 AM

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Irish State Secret!: Ireland's farm incomes rose a stunning 39.1% in 2010 and there was inevitably little fanfare from the Irish Farmers' Association (IFA) during Christmas Week in response to this news. In fact there was none.

EU27 real agricultural income per worker has increased by 12.3% in 2010, following a decrease of 10.7% in 2009, according to first estimates issued by Eurostat, the statistics office of the European Union. This increase results from a rise in real agricultural income (+9.9%), together with a fall in agricultural labour input (-2.2%). These estimates for the EU27 are based on data supplied by the national authorities in the member states.

In 2009, amidst the Great Recession, farm prices fell and public protests by farmers in several countries prompted the European Commission, and the EU’s 27 national governments, to provide new price support measures.

The price of milk rose 9.4% in 2010 and it's not surprising that farm incomes per worker rose most in countries with lots of dairy farms. Apart from Ireland's 39.1% rise, incomes rose 54.8% in Denmark; 48.8% in Estonia; and 32% in the Netherlands.

The number of farm workers likely fell in the Eu27 in 2010 while as regards the number of farms, the US has about 60,000 dairy farms compared with 1.4m in the EU from about 2m agricultural enterprises.

In Ireland, the IFA has been a well-versed practitioner of An Béal Bocht for many decades and it has paid rich dividends.

Apart from the public welfare provided by the Common Agricultural Policy (CAP) since 1973, in 1991 the prime example of socialism, the IFA under the leadership of Tom Parlon, won a huge bonanza agreement from the Santa Claus Fianna Fail-PD government giving farmers 23% of the €18bn national roadbuilding budget. It was irrelevant that in the European Union, land as a roadbuilding cost was an average 12% of budgets and to add to the pantomime, in 2002 Parlon joined the nominally free enterprise Progressive Democrats in return for the promise of a ministry.

In 2003, the then Minister of State said in defence of the corrupt land rezoning system, which has been a huge tax on property purchasers:  "that weakening private property rights...would be a great mistake...gift-wrapped in an ideology somewhere left of Stalin, which has no place in a modern dynamic open economy like Ireland.

Any measure giving the State the power to control the value of private assets would have major negative ramifications for thousands of property owners and would be a jump back to the dark days of the 19th century.

What if your home, your business or your farm is zoned for development? Should you be allow reap the benefits of this? In a democracy of course you should."

What could we have if we had a more perfect democracy? In the meantime, it's well to keep in mind the quote from William Shakespeare's Merchant of Venice: "The devil can cite Scripture for his purpose."

There is no official public data on development land sales  - - a situation which serves the interests of the IFA.

SEE: Finfacts article, July 2008: Irish Farmers and Sacred Cows

Bord Gáis cross-country gas pipeline construction in Ireland

During Chrismas Week, as the IFA ignored the news on the big jump in incomes, it had its well-varnished victims' cross on public display.

The chairman of the IFA Pigs Committee Tim Cullinan accused processors of betraying pig producers by pocketing the entire price increase negotiated with retailers.

He said the response of the factories will be seen by producers as greedy factory bosses behaving like Scrooge and taking the badly-needed price increase for themselves.

The IFA also reported that at a recent meeting with Fine Gael leader Enda Kenny and his team of representatives, IFA president John Bryan said there had been a constructive discussion and a valuable exchange of views on national and European issues affecting the agriculture sector.

The IFA delegation highlighted the CAP talks and the Mercosur trade deal as key European issues for the farming sector.

John Bryan said: “The negotiations around the CAP post-2013 will step up in 2011 and we emphasised to Enda Kenny how crucial it will be for Irish farming that we retain our full national envelope of funding.” He welcomed the pledge from the Fine Gael leader to work closely with his European People's Party colleagues in the European Parliament in the coming months to ensure the Commission is fully aware of our position.

On Mercosur, the IFA President said any deal would be very damaging for Irish agriculture, and particularly the livestock sector. He urged Kenny to seek political support from other countries across Europe for a revision of a trade policy that would have serious consequences if pursued any further.

IFA Rural Development Chairman Tom Turley urged the Minister for Agriculture Brendan Smith to fully utilise the total 2010 allocation for REPS (Rural Environment Protection Scheme) this year to avoid the carryover of payments on next year’s budget estimate.

Turley said that REPS 4 payments must be made this year. With 11,000 REPS farmers having already received their first 75% payment, this must now be followed by the remaining farmers receiving payment before year end.

Eurostat said this week that between 2005 and 2010, EU27 real agricultural income per worker is estimated to have increased by 10.0%, while agricultural labour input has fallen by 12.7%.

The increase in EU27 real agricultural income in 2010 is mainly the result of a rise in the value of agricultural output at producer prices in real terms (+4.3%), while input costs in real terms grew (+0.8%). The fall in the real value of subsidies net of taxes (-1.2%) and the slight rise in depreciation in real terms (+0.4%) have a marginal impact.

Real agricultural income per worker in 2010 is estimated to have risen in 21 member states and to have fallen in six. The highest rises are expected in Denmark (+54.8%), Estonia (+48.8%), Ireland (+39.1%), the Netherlands (+32.0%), France (+31.4%), Latvia (+25.5%), Belgium (+24.1%), Bulgaria (+23.0%) and Germany (+22.8%), and the largest falls in Romania and the United Kingdom (both -8.2%), Greece (-4.3%) and Italy (-3.3%).

In 2010, the value of EU27 agricultural output at producer prices is estimated to have increased by 4.3%, mainly due to an increase in the value of both crop production (+6.3%) and animal production (+2.4%) in real terms.
In crop production, the increase in value is almost entirely due to a rise in prices (+8.9%), while the volume is expected to fall (-2.4%). Prices are rising for all groups of crops, except olive oil (-0.4%), most sharply for oil seeds (+27.1%), cereals (+22.5%), potatoes (+13.1%) and fresh vegetables (+9.0%). The volumes of most products are declining, in particular sugar beet (-6.8%), potatoes (-6.7%) and fruits (-4.0%). A rise in volume is seen only for olive oil (+17.0%), protein crops (+27.0%) and rice (+1.9%).

The increase in the value of animal production in 2010 is the result of an increase in both producer prices (+2.0%) and volume (+0.4%). Prices are rising for milk (+9.4%), sheep and goats (+7.0%) and cattle (+0.4%), while they are estimated to fall for pigs (-2.6%). The volume rose for milk production (+1.4%), remains at almost the same level for pigs (+0.1%) and slightly decreased for cattle (-0.8%).

EU27 agricultural input costs (intermediate consumption) are expected to rise by 0.8% in real terms, due to an increase in prices (+1.1%), while the volume fell (-0.4%). The rise in input prices is driven by increases for energy and lubricants (+6.7%), feeding stuff (+3.2%) and maintenance of buildings (+3.3%). Lower input volumes are estimated for plant protection products (-5.4%) and maintenance of buildings (-2.5%).

Eurostat says agricultural income is defined as income generated by agricultural activities (as well as inseparable non-agricultural, secondary activities) over a given accounting period, even though in certain cases the corresponding revenues will not be received until a later date. It does not, therefore, constitute the income effectively received in the course of the accounting period itself. Moreover, it must not be confused with the total income of farming households as it does not comprise income from other sources (non-agricultural activities, salaries, social benefits, income from property).

The present estimates have been compiled by the national authorities in the member states of the European Union in accordance with the methodology of the Economic Accounts for Agriculture (which is close to the methodology of the national accounts, ESA95, but incorporates a number of changes to take account of the special features of the agricultural economy).

The real income of factors in agriculture, per annual work unit, corresponds to the real net value added at factor cost of agriculture, per total annual work unit. Net value added at factor cost is calculated by subtracting from the value of agricultural output at basic prices the value of intermediate consumption, the consumption of fixed capital and production taxes, and adding the value of production subsidies.

In order to take account of part-time and seasonal work, agricultural labour or changes therein are measured in annual work units (AWUs - - one AWU is defined as the work-time equivalent of a full-time worker).

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