Dairy fares best but all farm incomes are far from equal

Cantillon: New farming statistics show lopsided recovery in the sector

Farm income varies considerably by farm system, with dairy farms the most profitable.

Farm income varies considerably by farm system, with dairy farms the most profitable.

 

The ongoing drive to arrest the decline of neglected rural areas normally involves talk about crime and infrastructure to make places more attractive to live and invest in – but the problem even extends to farming.

The latest figures from the National Farm Survey, published yesterday, indicate that while average farm incomes have stabilised after the brutal hit taken during the economic crisis, some parts of the State are faring better than others.

Average farm income is highest in the southeast at €38,561, where dairy farming is prevalent. The Border area is the most disadvantaged region, with the lowest farm income and the highest reliance on direct payments.

The worry in terms of exacerbating the problem of underdevelopment across large swathes of the State is that those areas where the problem is already worst – such as counties in the northwest – is that farmland there lends itself to less profitable farming.

Farm income varies considerably by farm system, with dairy farms the most profitable. Although a difficult year, the average dairy farm income in 2016 was €51,809. Cattle-rearing farms reported the lowest average farm income in 2016, at €12,908.

Farms in the northwest, as well as those around the Border, tend to be in the dry stock sector, which means cattle and sheep farms. Those are characterised by low profitability, with the average income per hectare last year lowest on sheep farms at €311.

Farms in these areas tend to be smaller as well, which also hurts profitability. Issues such as the quality of the land, rainfall, and a shorter grass-growing season all contribute to less profitable farms, making it all worse. And add to the difficulties, while dairy farms have the highest level of borrowings, their debt to income ratio is just 1.75 compared to 2.08 on sheep farms and 1.97 on cattle farms.