Farm income down 26% last year

Average family farm income amounted to just €16,680 last year, the agriculture and food development authority Teagasc reported yesterday. According to Teagasc, the average full-time farmer on a family farm earned an income of €34,486. But the average income for part-time farmers was €7,899 in 2006.

Announcing the details of its survey of 1,159 farms, Teagasc said family farm incomes declined by almost 26 per cent last year compared with 2005.

But it acknowledged this figure was skewed because of a once-off direct farm payment in 2005 which created artificially high figures for that year.

Teagasc economist Liam Connolly said a more precise comparison between 2004 and 2006 showed an average rise of about 7.2 per cent in family farm incomes. But he said within that average there were mixed fortunes among the "very different" farming businesses.

In addition, the average family farm depended on the single farm payment for 98 per cent of its income. Teagasc said a small number of farms would have had negative income, if it was not for the single farm payment.

The best performers were the specialist dairy farms, where average family farm income was €36,221. This was followed by tillage where the average family farm income was €28,536.

Farms involved in cattle rearing had an average income of just €8,291, while those involved in sheep farming earned €11,902 on average. According to Mr Connolly the figures made it clear that the market for drystock cattle would not produce enough income to cover the production cost and "a major contribution of direct payments is needed to make up the shortfall".

Just one-fifth of all farms generate an income in excess of €25,000, while just 12 per cent of farms earn more than €40,000.

However, Teagasc said the number of farms where the farmer and or the farmer's spouse had an off-farm job amounted to 58 per cent of all farms. When you included pensions, social assistance or other non-farm income the percentage rose to 82 per cent. While he said the figures looked gloomy, he said there was still a future in farming, although he believed some may change out of sheep or drystock and go into tillage.

Farmers continued to invest in their farms, equivalent to about 36 per cent of average income in 2006. Overall costs were down by about 1.2 per cent in 2006 over 2005 on average.

He also made the point that while many farms were income- poor, they were asset-rich as the price of land continued to rise and in fact had outperformed every other sector of the general property market in recent years.

Commenting that land was "still a good asset", he said he believed some farmers were releasing equity in the value of the land to invest and provide a separate stream of income.

He said people wanted to remain farmers because the countryside was a good place to live and farming was still a desirable lifestyle.