20% Reduction in Farm Debts
Debt levels in the farm sector totalled just over €1.8 billion in 2011, according to the Teagasc National Farm Survey.
Speaking at the launch of the Teagasc National Farm Survey results in Dublin, today, Tuesday, 22 May, Anne Kinsella said: “farmers used the favourable market conditions experienced in 2011 to repay debt and the sector debt figure of €1.8 billion represents a reduction of 20% on the previous year”.
Farmers undertook considerable infrastructural investment in the 2007 to 2008 period, with sector investment totalling €2 billion in 2008 alone. This was followed by very poor market conditions and farm income in 2009 and the average debt to income ratio on farms peaked at 3.4 in 2009. The considerable improvement in farm incomes in 2011, up 32% on 2010, has enabled farmers to repay debt and to bring the debt to income ratio back to closer to 1.3, a more normal level for the sector.
Farmers continue to invest in the sector, with new investment in farming totalling €666 million in 2011. Commercial tillage and dairy farms account for the majority of this investment.
The large majority of farms have no farm business related debt, although this varies considerably across farm systems. Only 34% of all farms have business related debt, compared to 72% of dairy farms and over 40% of tillage farms.