CSO figures 'over-stated' farm income

RECENT figures from the Central Statistics Office show that it has been seriously over-stating national farm income for many years, the IFA has claimed.

Con Lucey, chief economist, said the IFA understands the new figures result from a major review of the information used by the CSO in making this calculation each year.

"The latest figures from the CSO show that national farm income in 2003 was €2,175m, whereas in February they said it was €2,590m, an over-estimate of 19%.

"The difference of €415m is equivalent to €66/week for Ireland's 120,000 farmers. It is apparent that the CSO has been underestimating costs in agriculture for many years."

Mr Lucey said that when the new CSO figures are adjusted for interest on farm borrowing, they show that average farm income last year was about €16,000.

This brings the CSO figures much more into line with the Teagasc national farm survey figures.

"Indeed, this readjustment strongly supports the case made by IFA president John Dillon during the tractorcade, when the Minister for Agriculture publicly disputed the Teagasc figures on the level of farm incomes in Ireland," he said.

Mr Lucey said one practical implication of the revised figures is that there is a strong case for a higher flat-rate VAT refund to farmers.

This issue is currently under review with the Department of Finance, Revenue and CSO, within the framework of the national partnership agreement Sustaining Progress.

IFA will be insisting that the new cost to price ratio is fully reflected in the flat-rate VAT refund. "Furthermore, there is now clear evidence that the VAT refund calculation for earlier years was based on inaccurate data. For example, the over-statement of farm income was 12% in 2000 and 15% in 2001, due mainly to costs being underestimated."

Mr Lucey said IFA will be seeking a repayment of under-compensation of VAT in the past, in the context of its 2005 pre-budget submission.