Financial impact of risk management tools

Jason Loughrey, Trevor Donnellan, Fiona Thorne

Industry impact: Economists from Teagasc, Cork Institute of Technology and University College Cork launched a report called ‘An evaluation of suitable tools to manage price/income volatility at dairy farm level in Ireland’ in September 2018. The report contains an assessment of currently available risk management tools, including the income averaging system. The research highlighted the strict eligibility rules relating to participation in the income averaging system, which meant that over half of all specialist dairy farms were automatically excluded from participation in the system. As a result, in Budget 2019, the scheme eligibility rules relating to off-farm employment were removed, thereby permitting a much greater number of farms to avail of the income averaging system.

Correspondence: jason.loughrey@teagasc.ie

Contribution of non-research stakeholders: Dairy Research Ireland and the Irish Co-operative Organisation Society (ICOS) provided organisation and administrative support during the project. Farmers participating in the National Farm Survey, Teagasc farm recording staff and Brian Moran (Teagasc).

Other contributors and collaborators: Farm Development Co-op (FDC) and UBS. Micheál O’Leary of Teagasc supplied data and ICOS. Dennis Bergmann, Declan O’Connor (CIT) and Thia Hennessy (UCC) also contributed to this research.

Funding: The Dairy Research Trust.