The two main farm organisations have rejected the accuracy of figures produced by Teagasc which show a 44.4 per cent increase in farm income last year. This was the first year that farmers operated with payments not linked to production.
The agriculture and food development authority said the increase in farm incomes in 2005 resulted from the change in EU policy to a decoupled premium system. This led to a once-off gain, so incomes will decline to more traditional levels this year.
Farmers received €600 million they were due from the previous year with the €1.6 billion to which they were entitled last year and this had led to a situation where incomes from farms was driven up to such a high level.
President of the Irish Farmers' Association Pádraig Walshe said neither farmers nor the general public should get too excited about the exceptional farm income increase. He said the average farm income was still only about €22,500 and the survey was not representative of all farms.
The trends for 2006 showed that national farm income this year would be back to its 2004 level.
President of Irish Creamery Milk Suppliers' Association Jackie Cahill dismissed the figures as "misleading to a degree that borders on the comical". Mr Cahill said the "jump" was simply a result of Teagasc lumping two years' payments into one due the changes in the single farm payment system.
The Teagasc survey said farm incomes rose on average by 44.4 per cent in 2005 to €22,459 per farm. Average family farm income was €15,557 in 2004, according to the work conducted by Teagasc's rural economy research centre.
However, the report revealed that the income generated from the marketplace actually fell last year. Farmers' average income from the marketplace, excluding direct payments, was only €1,360, (6 per cent of farm income) in 2005. That was a decline of 32 per cent compared to the market income of €2,010 in 2004.
Liam Connolly, head of the national farm survey team, said in 2005 farmers received an average once-off payment of €5,266 per farm in arrears from the coupled 2004 premium system, plus their 100 per cent entitlements under the single payment scheme. "This had a huge impact, especially on dry stock and cereal farms," Mr Connolly said. "Were it not for payment of these arrears, the increase in farm income would have been 10.4 per cent in 2005."
He added: "In a year where income increased by 44.4 per cent, the average farm income was still only 73 per cent of the average industrial wage." The survey carried out on 1,174 farms, excluding pig and poultry operations, showed that 55 per cent of farmers and/or a spouse had an off-farm job, compared with 52 per cent in 2004.
Full-time farms accounted for 38 per cent of farms (42,000) and had an average farm income of €40,480. Just under a quarter of farms had an income of less than €6,500, but on nearly all of these farms the farmer and/or spouse had some other source of income.
The survey also showed that direct payments comprised 94 per cent of family farm income