Disappointment at drop of €1,500 in farmers’ estimated average income

FARMERS have been surprised to see their estimated €17,500 average annual salary reduced to €16,000 due to a disparity between industry calculations from December to February.

IFA president John Bryan expressed “grave disappointment” at the huge disparity in yesterday’s CSO farm income figures compared to the provisional figures released last December.

At the time, the CSO showed a 46% increase in farm incomes for 2010 but this figure has been revised down to 31.5%.

Mr Bryan welcomed the correction from the CSO, which he said is in line with the IFA’s own estimates at the end of last year, but he said such discrepancies must be avoided in the future.

“The income increase indicates a recovery in the sector after two very difficult years in agriculture, where incomes dropped by over 40%.

“However, escalating fuel, feed and fertiliser costs are threatening the recovery and adding to volatility, which has the potential to undermine production as our model of family farming cannot absorb the impact of a boom-bust cycle,” said Mr Bryan, adding that based on the new figures, average farm income stands at €16,000.

“The Single Farm Payment and the farm schemes are crucial for all farm families and continue to make up a very significant proportion of net farm income,” he said.

The IFA’s calculated €17,500 salary estimate is based on the CSO’s agricultural operating surplus, estimated to have increased by 31.5% during 2010. In December, the IFA signalled to the CSO that by its measures, the operating surplus in farming was around 33% for 2010. The CSO’s 46% estimation for boosted annual output was based on the data it had available at the time.

The CSO has since changed its methodology for data gathering. For the IFA’s calculation, the 14.5% overall disparity amounts to around €207 million in monetary terms. About €135m of this is down to the CSO’s change in data collection methodology, with another €56m down to Government farm subsidies expected to be paid in 2010, but then held over into 2011.

CSO analyst Morgan O’Donnell said: “The change in our methodology accounts for most of the disparity, and the timing of the payment of subsidies accounted for most of the rest.

“These are things that we discussed with the IFA and Teagasc. We are using new administrative data and a different mechanism of calculation. That would account for about 9% of the difference.”

The CSO issues estimates on farm outputs, inputs and operating surplus for the sector. The IFA and Teagasc each use their own mechanisms to translate those production figures to estimate farmers’ average salary.