Farm Incomes bear little Relation to Asset Values
Teagasc Director, Professor Gerry Boyle, described as pretty much meaningless the statement that “… a farm of that value [€750k] is likely to generate an annual income of just over €41,000”. Professor Boyle was reacting to media reports of proposals that the children of business owners with assets of over €750,000 would not qualify for third level education maintenance grants.
Professor Boyle said: “ That he was mystified as to how such a construction could be put onto Teagasc published data according to weekend media reports that “…a farm of that value [€750k] is likely to generate an annual income of just over €41,000”. Teagasc did not provide the type of calculation to any party as implied by the article. Teagasc does not publish any Family Farm Income (FFI) estimates for different farm asset values.
“It makes little sense to take a particular asset value and assign a single income to that asset class when the range of income at that asset class is likely to be substantial. There is a basic misunderstanding of the nature of farm income data revealed in the article. Farm incomes at every farm size level or asset class are notoriously variable,” he said.
He pointed out that the Teagasc National Farm Survey for 2011 showed that Average Family Farm Income averaged €24,461, the highest for many years. However, he warned that farm incomes are notoriously variable from year to year.
He went on to say that, apart from the tremendous variation in farm incomes across farms of the same size, value and between years. It should also be borne in mind that reported farm incomes relate to all family members that depend on the farm for a livelihood. Many farms will have more than one family member gainfully employed. For compatibility with non-farm income it would be preferable to calculate farm income per family labour unit.