Dairy incomes are up but climate change issue looms

Cantillon: Sector plays dangerous game selling itself abroad as unspoilt by industry

What’s most eye-catching about Teagasc’s annual farm income survey is just how low average wages in the sector are: €25,662 in 2020. This reflects the fact that many farmers run small, part-time operations. The headline figure also masks the bigger incomes being generated on the dairy side, traditionally the most profitable farming practice.

Dairy incomes on average rose by 13 per cent to €74,236 last year on foot of lower production costs and increased milk volumes. The sector has long been the jewel in Ireland’s farming crown, punching above its weight internationally. Ornua’s flagship Kerrygold brand was the State’s first billion-euro food brand.

Pristine pasture

However, the sector is also playing a dangerous game of selling itself abroad, as a pristine pasture of grass-based farming, unspoilt by heavy industry, when the truth is more problematic. Trends in water quality, emissions and biodiversity are all going the wrong way – primarily because of a ramping-up in dairy production in line with the ending of EU milk quotas in 2015. The Republic’s dairy herd is almost 30 per cent larger while the island’s milk pool – currently at about 10.4 billion litres – is on course to double.

Increased production

Government and industry here have been fudging the issue for years, promising plans and aims on climate while announcing ever-bigger food production targets. Teagasc links last year's rise in dairy incomes to increased production. In the face of the same dynamic, the Dutch government was recently forced to cull part of its dairy herd while imposing strict phosphate quotas on dairy farmers – a source of great controversy in the Netherlands.


The Climate Action Bill will – for the first time – assign legally binding carbon budgets to agriculture which, if broken, will leave the State open to possible legal challenges. Farmers are a powerful lobby group and keeping them happy while dealing with a set of challenging climate-change targets will not be an easy square to circle.