Farm incomes increase by 17.3% in 2001
This is the second annual increase in incomes following a period of decline in the late 1990s. Incomes in 2001, for the first time, exceeded the previous high level of 14,326 in 1995.
Liam Connolly, who led the Teagasc income survey team, said that in spite of the increase in the past two years, the relationship between farm incomes and average industrial earnings has disimproved. In 1995, average income per person employed in agriculture was 61% of the average industrial wage. This dropped to 40% in 1999 and was at 50% in 2001. The improved position was due mainly to higher output in the dairying, cattle and sheep sectors, resulting from higher prices and increased direct payments.
Overall farm output increased by 11% while farm production costs increased by 8%. Direct payments increased by 16%.
The survey is based on an analysis of accounts on a representative sample of 1,167 farmers. The total number represented by the survey is 120,200, which is 4,000 less than the 2000 survey. Very small farms are excluded as are pigs and poultry.
According to the survey, 12,000 farmers had an income in excess of 40,000 and a further 13,000 earned between 30,000 and 40,000. Three out of four farmers with incomes over 40,000 were involved in dairying.
Almost 50% of farmers had an income less than 6,500. The majority of these were drystock farmers and the vast bulk had other sources of income in the form of off-farm employment, social welfare or a pension. However, 12,000 farmers had a farm income less than 6,500 and no other source of income. According to the survey there was an estimated 41,000 full-time farmers where the farmer had no off-farm job. The average income on these farms in 2001 was 32,800, almost identical to the average industrial wage. While direct payments increased by 16%, their overall contribution to farm income declined from 73% in 2000 to 72% in 2001.
In cattle and sheep farming, direct payments accounted for over 100% of income. In other words, returns from the marketplace were less than production costs. Direct payments made a lower contribution to incomes on tillage and dairy farms, accounting for 85% and 22% respectively. As in previous years, payments under the Rural Environmental Protection Scheme (REPS) had a considerable impact on incomes from cattle and sheep farming. Dairying was the highest income earner in 2001. Average income on dairy farms was 34,400, an increase of 33% on 2000, reflecting increased milk and cattle output and higher direct payments. Income from tillage, at 24,100 per farm, was down by more than 10%, due to reduced value of output and lower direct payments.
Average income on cattle farms was again the lowest at 7,500, representing an increase of 7% on 2000. Sheep incomes increased by almost 40% due primarily to the buoyant export demand.
