EU proposals would benefit farmers
The 2003 Teagasc outlook conference was also told in Dublin yesterday that the new EU policies would result in a rapid decline in the number of dairy farmers from 26,500 at present to 15,000 by 2012.
Teagasc economist Thia Hennessy, who is attached to the FAPRI Ireland analysis unit, predicted dairy farmers who stay in production would be better off due to a substantial increase in milk output.
Those who leave the industry would also do better because of EU payments. Average milk output per farm would increase from 188,000 litres (42,000 gallons) at present to 320,000 litres (70,000 gallons), while the 15,000 remaining dairy farmers would have incomes 25% higher than if current policies continued.
The EU proposals provide for compensatory payments for all dairy farmers, including those who quit production from 2004 onwards.
A maximum payment of 4.5c/litres (20c/gallon) would be payable from 2008 and would act as an incentive for some farmers to cease production.
The analysis shows reforms in the beef sector, which involve the transfer of EU payments from an animal-based to an area-based system, would mean the majority of producers would experience some improvement in income.
