Farmers' incomes are set to decline further next year, while EU agricultural reform is likely to deal further body blows to the beef sector, a conference on the future of farming has been told.
The latest set of figures from the Central Statistics Office, confirming a 4 per cent decline in farm incomes during 1998, "masks a severe income decline on a large number of cattle and sheep farms", according to Mr Liam Connolly of Teagasc.
Speaking at the annual Teagasc agri-food economics conference in Dublin yesterday, Mr Connolly said the bringing forward of £80 million in direct payments from 1999 to this year had also reduced the impact of the downturn.
Milk prices, he said, could decline by about 4p per gallon in 1999 due to continuing weak international demand for dairy products. It was difficult to see beef prices returning to early 1998 levels, he said, and he predicted a fall of £25 per acre in margins. The sheep sector was unlikely to pick up, though a small increase in pig margins could be expected. If yields returned to normal, margins from cereals would increase by some 5 per cent.
The grim outlook is compounded by indications that EU agricultural reform under Agenda 2000 will lead to a drop of 20 per cent in farm incomes by 2007, but with the value of beef output falling by 45 per cent, according to another economist, Mr Kieran McQuinn.
The Minister for Agriculture, Mr Walsh, said the Agenda 2000 package as proposed was "seriously adverse, not just for Irish agriculture but for the Irish economy as a whole". The uncertainty it was generating meant negotiations had to be completed no later than next March.
With the State especially vulnerable on beef, a proposed price reduction of 30 per cent, and supply control measures, went "far beyond what is needed to rebalance the market". The milk proposals involved a 15 per cent price reduction and compensatory premiums which fell short of what was required to compensate for it.
A proposed milk-quota cut was discriminatory against Ireland, and a commitment since 1984 that Ireland would get priority in quota allocations was being ignored by the European Commission, Mr Walsh said.
While the decline in aggregate farm income was much smaller than some had suggested, the reality was that "certain farmers, mainly some in livestock and cereals", experienced genuine hardship. "It is a matter of grave disappointment that despite many concessions I have obtained, [meat] factories have failed to make greater use of revised intervention arrangements and not played their full part in providing reasonable prices to producers."
A Teagasc survey shows a drop of almost one-third in the level of investment planned by farmers for 1999. They intend to invest £186 million compared to £270 million this year, and £450 million in 1997.
