Warnings of two-tier system in farming

IFA President Joe Healy

The Irish Farmers’ Association (IFA) has warned of a two-tier agricultural system after a report showed a gulf in earnings between those working in dairy and those in other farm sectors.

According to the Teagasc 2017 National Farm Survey, the average family farm income across 84,599 farms was €31,374 — a 32% increase on 2016.

However, that was driven to a huge extent by a dairy sector which rebounded last year from a difficult 2016. The average dairy farm income last year stood at €86,115 — multiples of that in comparison to other sectors such as cattle, sheep, and tillage.

Overall, 30% of farms were seen as vulnerable and 35% earned less than €10,000 last year. Despite dairy representing one in five farms, the sector was responsible for half of all farm investment last year. The boost in milk prices last year meant dairy farm incomes rose by 65% overall, while tillage farms saw an average increase of 20% in earnings in 2017 and sheep farmers had an 8% annual income increase.

The boost to incomes on tillage farms was associated with higher yields and lower production costs and the report pointed out that since tillage farms are typically larger in size than other farm types, the average income remained low. Tillage farms averaged 61 hectares in size, ahead of the dairy sector where average farm size was 56 hectares.

According to the survey, 51% of farm households were in receipt of an off-farm income last year — up 2% compared with the figure for 2016 — and 27% of farmers were getting the pension.

Average income also includes direct payments from the EU.

IFA president Joe Healy said the results of the survey highlight the need for farmers to be protected against the fallout from Brexit and to secure improved payments in the Common Agricultural Policy (CAP) after 2020.

Asked whether farming was now operating a two-tier system, he said: “How can I sit here and say there is not when you look at the figures? The figures very much support that but having said that, there are families and farms that are not suitable for dairying and we have to ensure the opportunities are there in the other sectors for those farmers and the next generation.

The IFA has called for a fully funded CAP budget that would include an increase in sheep payments and an increase of at least €200 per suckler cow per year.

Mr Healy is due in Brussels today for a meeting regarding the EU Working Party on the Food Chain and said a fundamental change is needed regarding the cut from the consumer euro that is received by the farmer.

He said at present, the producer receives 21c from the consumer euro, compared with the 51c taken by the retailer.

He said that, for some farmers, waiting for improvements following Brexit and CAP reform might not be an option.

There are three pillars to sustainable farming — economic, social and environmental,” he said.

“We want to maintain that family farm that we have. I was in China last week and that is the thing they bought into — the family model of farming.”

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