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Farm Incomes Fall 30 per cent in 2009

New farm income figures published show the difficulties on farms last year. The average family farm income in 2009 was €11,968, down by 30 per cent on 2008. That’s according to the NFSReport09 published today, Tuesday, 8 June. This decline comes on top of a 13.7 per cent drop in incomes in 2008 bringing the overall decline in family farm income to 40 per cent since 2007.

The poor income situation on farms last year was due entirely to a drop of 14 per cent in the value of farm gross output. Despite farmers reducing their input costs by 7 per cent, the fall in market prices for farm produce led to a significant drop in incomes.

Speaking at the launch of the report in Dublin, Head of the National Farm Survey, Liam Connolly said: ”Output per farm declined across nearly all farming systems, with the largest decline on specialist dairy farms and on the mainly tillage farms, where milk and cereal prices fell in 2009 due to poor market returns. Milk prices dropped by 30 per cent last year resulting in a 48 per cent decline in income on specialist dairy farms. The last two years have been disastrous for tillage farmers who have seen their average family farm income drop by 62 per cent from 2007 levels.”

Direct subsidy payments continue to be extremely important to farm businesses. The average direct payment in 2009 to Irish farmers was €17,109 per farm, accounting for 36 per cent of gross output and 143 per cent of family farm income.

The poor market returns last year had the largest impact on full-time farms. On the more commercial full-time farms the average family farm income was €24,214, down from €37,590 in 2008. That’s a drop of 35 per cent and this group of farmers have seen their farm incomes halve since 2007. By comparison the average family farm income for part-time farms was €6,611, a 13 per cent decline in the year.

Income varied across the farming systems. The average family farm income ranged from €23,684 on specialist dairy farms, to €6,563 on cattle rearing farms. On tillage farms, average farm income was €15,247 while on sheep farms, the figure was €9,688. Sheep farmers were the only farming group that showed a small increase of 1 per cent in family farm income last year.

Head of the Teagasc Rural Economy Research centre Dr Cathal O Donoghue said that off-farm income continues to be extremely important on over half of all farms in Ireland. On 52.6 per cent of all farm, the farmer and/or spouse had an off-farm job. But the decline in employment opportunities in the wider economy is also showing up in the NFS data. 2009 was the second year in succession, where off farm employment by farmers declined, down by 3.7 per cent. On 79 per cent of farms, there was some source of off-farm income, be it from employment, pension or social assistance.”

Investment in new facilities on-farm has returned to more traditional levels after two years of higher levels of investment. In 2009, €662 million was invested on farms.