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Gnáthamharc

Farm Household Incomes

Dáil Éireann Debate, Wednesday - 16 September 2020

Wednesday, 16 September 2020

Ceisteanna (170)

Bernard Durkan

Ceist:

170. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the extent to which farm incomes have fluctuated over the past ten years; the way in which fluctuations have been manifested itself in terms of impact on farm family incomes; and if he will make a statement on the matter. [24417/20]

Amharc ar fhreagra

Freagraí scríofa

Family Farm Income (FFI), the return from farming for family labour, land and capital, is the principal measure used in the Teagasc National Farm Survey.   The preliminary results for the 2019 National Farm survey issued in June 2020 shows that the average family farm income (FFI) for 2019 was €23,934, a 2% increase on 2018 figures. Following a decline in the average income level in 2018, largely due to extreme weather, there was a recovery in average FFI in 2019. However, this recovery was uneven, with the average FFI concealing differences across the various farm types.

Family farm income varies considerably by farm system. Dairy farms are consistently the most profitable farms. However, it should be noted that almost all dairy farms are classified as full-time farms, with farms requiring 0.75 of a standard labour input being defined as full-time and those requiring less as part-time. Most cattle farms and the majority of sheep farms are classified as part-time in terms of labour input requirements, even though in many cases the farmers may not have off-farm employment. Around two thirds of all farms are classified as part-time.

Direct farm payments are a very important part of FFI, with an average payment per farm of €18,452 in 2019, or 77% of the average FFI. There are noticeable differences between farm types; estimates for dairy farms show that the direct payments account for 31% of income, while cattle and sheep farms are very reliant on direct payments and many would be operating at an economic loss without them.

A significant change in the methodology in the 2012 Teagasc National Farm Survey saw farms below €8,000 of Standard Output (SO) no longer included in the survey sample. Up to 2011 the threshold for inclusion of farms in the survey field had been €4,000. As a result, a straightforward comparison between the 2012 results and those of preceding years could easily lead to an incorrect interpretation of intervening changes. A further small methodology change occurred in 2018 based on data from the 2016 CSO Farm Structure Surveys and results from 2016 and earlier years are not directly comparable.

However, looking at the results between 2012 and 2019, and bearing in mind the methodology change, FFI has fallen over this period with average FFI down 6%. Dairy farms have seen FFI increase by 35%, while cattle and sheep farms have seen FFI fall by about 20%. Tillage farms have fallen back close to the average of 6% across all farms.

The CSO’s publication, ‘Output Input and Income in Agriculture’ shows that aggregate farm income or operating surplus has risen over the past decade from €1.8 billion in 2010 to over €3 billion in 2019. Operating surplus is defined and calculated by the CSO by subtracting compensation of employees from farm income accruing from farm output.  The figure is comprised of the operating surplus earned by farmers and that earned by agricultural contractors. It is an estimate of income before deductions for interest payments on borrowed capital, land annuities and rent paid by farmers to landowners for the use of their land. It does not include income from non-farming sources and may not be equated to household income.

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