Irish farm incomes have dropped by an estimated 28% this year, on top of last year’s 12% decline, leading to what the Irish Farmers’ Association is calling “the worst farm income crisis in a generation”.

A new report from the IFA says incomes in 2009 were affected by the fall in product prices, government cuts in farm schemes and continuing high input costs.

“The depreciation of sterling has also had a significant impact on producer prices, as the agri-food sector exports more than 40% of its output to the UK,” it added.

IFA president Padraig Walshe accused the government of being “in denial over the dire income situation with their severe cuts across vital farm schemes this year”.

In particular, the IFA points to the 14% cut in disadvantaged area payments, increased modulation and the ending of sugar beet restructuring aid.

Mr Walshe said the income reductions in the last two years have left the average farm income at only €13,000 in 2009, a quarter of the average salary in the public sector.

“The facts are that most farmers and small businesses are hanging on by their fingernails and the government must come forward with immediate action that improves our competitiveness by reducing energy, labour, waste disposal and bureaucracy costs.”

The IFA report reveals that not all sectors have suffered equally. While dairy farmers have seen a 28% drop in prices, and cereals 27%, the sheep and poultry sectors have enjoyed relative price stability.

“In the cattle sector, production remained reasonably stable, but price dropped by 10%.”

Official estimates of Irish farm incomes from the government are expected on 4 December.

Meanwhile, agriculture minister Brendan Smith has announced that he is bringing forward €84m-worth of environmental and pollution control payments, that would normally be paid in the New Year.

For a FW view on Irish farming, see Phil Clarke’s Business Blog