Convergence could render some tillage farms non-viable
The Annual Review and Outlook for Agriculture, Food and the Marine 2020, which was released today (October 8), highlighted the concerns tillage farmers have over convergence.
The report commented on the loss of land from the tillage sector in recent times and highlighted access to land and convergence as some of the main reasons why farmers are leaving the low-emissions sector.
The cereals area has dropped by 51,000ha (16%) since 2012 according to the report and in 2019 stood at approximately 267,700ha.
The report outlined that “this is partly explained by more profitable sectors being able to afford to buy and lease land at a higher value than tillage farmers”.
Risks from convergence
When examining the sustainability of the sector, the review stated: “Tillage farmers are concerned that their sector is potentially one of the sectors most at risk from convergence and capping proposals in the next CAP [Common Agricultural Policy] with average payments standing at €25,349 and accounting for 74% of family farm income.
Reduction in direct payments may render some tillage farms moving from a viable to a non-viable status and could further reduce tillage area following a reduction of 50,000ha since 2012.
The 2019 Teagasc National Farm Survey placed family farm income on tillage farms at €34,437. This is the second highest income of all the sectors coming in behind dairy and as stated above 74% of this income comes from farm payments.
Viable and non-viable
The report described Irish tillage farmers as price takers, as Ireland accounts for just 1% of EU grain production and is competing with lower-cost production systems.
The department outlined that: “Diversification into producing for higher-value markets is seen as essential for the sector to remain viable.
“These outlets include the food and beverage sector with barley for brewing and distilling and food-grade wheat and oats along with an important seed production sector.”