THE BSE crisis has dealt a heavy blow to farmers, with national farm income estimated to have dropped by around 1 per cent in money terms over the past 12 months, the Irish Farmers' Association has said.

The major negative factor affecting incomes was the BSE crisis in the beef sector, according to the IFA, with cattle prices down by 14 per cent.

"It is fair to state that even a more serious problem for the beef sector was avoided only because of EU supports," it added.

In its Farm Income Review for 1996 issued yesterday, the IFA said the value of the gross agricultural output is estimated to be down 1.6 per cent to £3.5 billion.

The outlook for next year is that some further reduction in farm income is to be expected, according to the association.