Farmers may invest as much as €1 billion in their farms in the current year, according to a scientific survey carried out by Teagasc, the agriculture and food development authority, writes Seán MacConnell, Agriculture Correspondent
The National Farm Survey carried out by the organisation on investment intentions this year found that the farmers planned to invest a total of €612 million, 71 per cent more than last year.
According to Anne Kinsella, who carried out the survey of 1,020 sample farms, if the pattern of understating investment was repeated again this year, actual farm investment could be as high as €1 billion.
The reintroduction of the farm waste management scheme and concerns with compliance regulations have resulted in higher planned expenditure on buildings, the Teagasc report said
Planned investment in farm buildings increased from €167 million for the 2005 year to €261 million in 2006.
For 2006, farmers said they planned to invest €85 million on machinery. In the past, they have understated their planned investment in machinery, as they did last year. The planned investment was €105 million - the actual investment was €288 million.
The survey found that at individual farm level, the average planned investment was €26,240 compared with a planned investment of €15,291 a year ago. "The survey showed planned investment in land for 2006 at €242 million, but again this figure could be exceeded, because farmers planned to invest just €42 million in land last year whereas the actual investment in 2005 was €125 million," Ms Kinsella said.
The substantial increase in planned land investment between 2005 and 2006 could be due to several factors, including compulsory purchase orders on land for road-building and lands sold for development, she said.
"With premium prices received for these lands and sites sold, farmers are in a position to invest substantially to replace this land," Ms Kinsella said.