Farm income rise a once-off boost

A ONCE-OFF boost of 43% in direct payments to farmers in 2005 was the main factor in their 24% income increase for the year, according to the Central Statistics Office.

The late payment of outstanding headage based premia, plus the new Single Farm Payment, in the same year, increased direct subsidies from €1,470m to €2,110m.

IFA Chief Economist Con Lucey said the 2005 farm income of €2,664m was nominally the highest since 1995, which was the year prior to the first big BSE scare.

But in real terms, when a decade of inflation is factored in, the 2005 income is only 81% of the 1995 income.

Inflation has added 26% to farm costs over the past decade, according to Lucey. Over 20 years, farm costs increased 85% for energy, 37% for veterinary costs, 26% for fertilisers, and 34% for farm services.

Mr Lucey pointed out, "Farm income is particularly vulnerable to inflation, as there is no indexation for inflation built into EU price supports, or EU direct payments, and EU market prices are increasingly influenced by the low priced imports as a result of WTO and other factors.

Also, with a rigid land market making enlargement of scale difficult, farmers find it difficult to increase productivity to offset the effects of inflation."

His 2005 farm income report shows all farms averaging €18,720, full time farms averaging €23,525, public sector employees averaging €43,420, and industrial employees averaging €30,004.