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News : Irish Economy Last Updated: Jul 1, 2011 - 9:12 AM


Irish farm income in 2010 shows annual increase of 28.0%; IFA says EU payments/subsidies account for 94% of income
By Finfacts Team
Jun 30, 2011 - 3:39 PM

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Source: CSO

Irish farm income (operating surplus) for 2010 shows an annual increase of 28.0% before deductions for interest payments and land rental. This follows a 31.0% decrease in 2009. The IFA (Irish Farmers' Association) said today that Irish farmers depend on EU payments/ subsidies for 94% of their income.

The increase of 28% in 2010 income can be mostly attributed to an increase of 12.2% in goods output.

Today's figures from the CSO update the preliminary estimates published in March 2011 using final annual data rather than estimates as used in the preliminary accounts release.

Comparing 2010 with 2009 shows that:
  • The value of goods output by the agriculture sector increased by 12.2% in 2010, or €578.8m;
  • The value of cattle output increased by 1.8%, or €26.7m, primarily due to higher prices in 2010;
  • The value of pigs output increased by 9.3%, or €28.4m, primarily due to an increase in volume during 2010;
  • The value of milk output increased by 40.0%, or €439m, due to increases in volume and price during 2010;
  • Total intermediate consumption increased by 0.5%, or €22.4m, in 2010.

The operating surplus for individual EU member states in 2010 are given on page 8 of the CSO release (pdf). This table shows an increase of 18.1% in operating surplus between 2009 and 2010 across the 27 member states.

IFA president John Bryan said the final CSO farm income for 2010 confirms the recovery in agriculture; however average farm incomes are still only €18,000.

John Bryan said: “The Single Farm Payment and the farm schemes continue to be crucial for all farm families and make up a very significant proportion of net farm income. Teagasc figures show that direct payments made up 94% of farm income last year.”

He said the income increase indicates a recovery in the sector after two very difficult years in agriculture, where incomes dropped by over 40%. “Escalating fuel, feed and fertiliser costs are dampening the recovery and adding to volatility, which has the potential to undermine production as our model of family farming cannot absorb the impact of a ‘boom-bust’ cycle.”

The IFA president said, “In the context of the EU budget proposals, and decisions on the public finances, the figures demonstrate the importance of direct payments and Government support for schemes in underpinning agriculture’s contribution to the economy. It is vital that all existing supports are maintained to achieve the growth and export targets for agriculture and the food industry set out in Food Harvest 2020 (a Government report).”

We have checked John Bryan's figure of 94% which suggests that Irish farmers are almost totally dependent on public welfare. 

Teagasc, the State agricultural research agency, carried out a National Farm Survey in 2005 (pdf).

According to the survey, average farm income from the market place, excluding direct payments, was €1,360 in 2005 (only 6% of Family Farm Income - - FFI) compared to €2,010 in 2004 a decline of 32%.

On full-time farms average FFI was €40,483 compared to €30,650 in 2004, an increase of 32%. The average FFI for part-time farms was €11,372 (€6,407 in 2004), an increase of 77%.

Total direct payments/subsidies per farm increased by 56% between 2004 and 2005. As a percentage of FFI, direct payments/subsidies were at 94% in 2005 (87% in 2004).

Approximately 24% of all farms had an income from farming of less than €6,500. On an estimated 51% of these farms, the farmer held an off-farm job. For this latter group, 99% of farms, the farmer and/or spouse had other income from off-farm employment, pension or social assistance (92% in 2004).

18% of farms had an FFI exceeding €40,000 per farm (10% in 2004), with 12% having FFI between €25,000 and €40,000 quite similar to figure of 11% in 2004.

Farmers made over €4bn from the national roadbuilding programme during the boom, never mind a bonanza from other development land sales.

Averages conceal a multitude but the overall figure of the industry being dependent on handouts, suggests that a minority of farmers are responsible for most of the output.

The direct payments under the EU's Common Agricultural Policy are made to farmers even if they only spend their time watching the grass grow.

According to Savills in 2007, in France, each field changed hands at least once every 70 years, but in Ireland on average a field changed hands every 555 years! Total annual turnover in Ireland was less than 0.2% of the total acreage. Countries with sales restrictions, such as France, were cheapest.

Land was about €6,000 a hectare, compared with almost €60,000 in Ireland - -  the most expensive in Europe in 2007 -- as French land must be offered first to young local farmers. In the later years of the bubble in Ireland, demand has been boosted by purchases of “lifestyle farms,, especially within 100 km of Dublin, coupled with the increasing trend of “off-farm” employment leading to commercial farmers in effect becoming “hobby farmers.”

It seems strange that with the IFA highlighting that most farmers dependent on what is effectively dole, that land turnover was so low.

SEE: Finfacts article, Sept 2009: Ireland: A "smart" economy in food better than pie-in-the-sky aspirations?

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