FARM INCOME UPDATE

Q.  What is the level of average farm income?

A.  The latest official figures are from the Teagasc National Farm Survey for 2008 (published July 2009), which shows an average farm income of €16,993 or €327/week. 

Average farm income in 1995 was €14,236, which means that farm income has grown by 19% in the 13-year period. However, increases in farm income have not kept up with inflation. In real terms therefore, average farm income in 2008 was 22% lower than in 1995. 

Farm incomes between 2007 and 2008 fell considerably. In 2007, Farm Income was €19,687. Therefore, average farm incomes fell by 13.5% between 2007 and 2008.

Q.  How does this compare with incomes in other sectors?

A.  CSO data shows that the Average Industrial Wage  in 2008 was about €35,000 while average earnings of public sector employees were over €50,000.

Q.  But some farmers have off-farm income as well?

A.  Yes, the 2008 Teagasc Survey shows that 40% of farmers have an off-farm job.  The average farm income of this group of farmers was €10,900.  For the remaining 60% of farmers who are full-time farmers, (i.e. do not have an off-farm job), their average farm income in 2007 was €21,100.

Q.  When the incomes of spouses are taken into account, then farmers are as well-off as others?

A.  It is true that many spouses on farms have an off-farm income to support their families.  But you cannot compare the income of two earners on a farm with the single income of an industrial worker. 

Q.  Some farmers have much higher incomes than others?

A.  The top 31.3% of farms in the 2008 Teagasc Survey (32,800 farms) are defined as commercial or “full-time” farms (this definition is based on the scale of the farm enterprise and is different from “full-time farmers”).  The average farm income of this group of farms in 2007 was €37,590.  But it must also be taken into account that, on average, there were 1.34 family labour units producing this income.  Thus the average farm income per labour unit was about €28,052.

Q.  How has farm income been going in recent years?

A.  The easiest comparison to make is between average farm income and average industrial earnings.  In 1996 and 1997, average farm income was about 75% of the average industrial wage.  In 2008 it had fallen to 49% of the Average Industrial Wage.

Q.  Is it true that farm income is now almost totally dependent on subsidies (EU direct payments)?

A.  Farm income is the difference between the receipts coming into the farm and the production costs/expenses going out of the farm.  Under the CAP, farmers have three main revenue sources from farming: sales of farm products, the EU single payment (which arises from a series of past reforms of CAP), and other direct payments tied to specific requirements or location (mainly REPS and Disadvantaged Areas payments).

Taking the "average farm" in the 2008 Farm Survey, the level of receipts is as follows:

Product sales:                  €38,492

Single Payment:                €11,854

Other payments (REPS, DAS):           €  5,324

Total receipts:                     €55,670

Total costs:                           €38,677

Farm income:                     €16,993

Thus it is clear that product sales continue to be the largest source of farm revenue.  However, it is also clear that, without direct payments, in 2008 there would have been no income from the average farm, as product prices were slightly below total production costs.

August 2009

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