Irish farmers feel income squeeze

Irish farmers are facing a 30% drop in their incomes over a two-year period as falling prices and rising costs take their toll.

Results from the Teagasc National Farm Survey show that average family farm income in Ireland in 2008 dropped 14% to €17,000 (£15,000). Dairy and tillage farms suffered the greatest falls.

Taxpayer support grew in importance too, with direct subsidies contributing 31% to farm output and accounting for 103% of farm profit – “the highest percentage ever”.

But the Irish Farmers Association is warning of further economic hardship to come, with output prices down an average of 13% so far this year, compared with 2008.

“If current trends continue, farm incomes will plummet by up to 30% between 2007 and 2009,” said a statement. “This can only be described as a crisis, with average farm incomes now heading for half the industrial wage.”

Teagasc agrees that the income squeeze is set to continue in 2009 and points to the fact that off-farm work is also getting harder to find.

“For the first time since the mid-1990s the percentage of farms where the holder and/or spouse had an off-farm job declined from 58% in 2007 to 56% in 2008,” it says.

“This obviously reflects the employment difficulties in the wider economy and is a worrying development given the importance of off-farm income to farm households.”

Teagasc head of rural research Cathal O’Donoghue also explained that on-farm investment reached its highest ever level in Ireland in 2008, mainly due to the widespread uptake of the Farm Waste Management Scheme.

Some €2bn was spent on new buildings, machinery and other on-farm facilities, on top of a €1.4bn investment in 2007.

“The average gross investment per farm in 2008 was €19,480, equivalent to 115% of the average farm income,” said dr O’Donoghue. “These investments have led to an increase in farm borrowings in 2008, up by a total of €500m on the previous year.”

IFA president Padraig Walshe warned that this debt pressure would compound the cash flow problems Irish farmers are already feeling, and urged banks to support their farming customers

The IFA is also calling for stronger dairy support, the lowering of input costs and more effective regulation of the retail sector.


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