Each acre of tillage generates an ‘economic impact’ of €1,600

Irish tillage farmers’ expenditures help to keep “jobs and incomes in rural communities” according to a new report.

This finding was published in a report by Tillage Industry Ireland – an Economic Impact Assessment of the Tillage Sector in Ireland.

The report was published this week and was prepared by Prof. Michael Wallace of University College Dublin (UCD).

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The report broke down the economic impact of the tillage industry, including the impact on the rural economy in Ireland.

Direct farm output

The total direct farm output across the tillage sector was approximately €640 million per annum from 2014 to 2018. Feed cereal production makes up the largest proportion of this figure – at 49% (see figure below).

Source: Tillage Industry Ireland

According to the report, the average income of “mainly tillage farms” is estimated to be €34,000 per annum over the last five years, second only to the average income on dairy farms.

The report states that direct payments are a “critical part of tillage farm output and income”, representing 22% of gross output and 71% of family farm income.

Expenditure in the rural economy

From 2014 to 2018, Irish tillage farmers spent an estimated €423 million per annum on inputs and invested around €54 million per annum in machinery, buildings and land improvements.

The report states that previous research has suggested that most farmers’ input expenditures occur within a 35km radius of their farms, thereby supporting their local economies.

The report said: “The input supply sectors comprise numerous, often small businesses that are geographically dispersed through rural parishes providing essential jobs and incomes in those communities.”

The estimated average net cash-flow from tillage production was €200 million per annum, from 2014 to 2018. According to the report, much of this cash-flow is “used for household expenditure, further supporting incomes, jobs and social activities in rural towns and villages”.

Output in the economy and employment

According to the report, the tillage sector is estimated to contribute over €1.3 billion per annum to output in the Irish economy. This impact equates to almost €4 million per 1,000ha of crop production (or €4,000/ha). That could alternatively be expressed as €1,600/ac.

The report also suggested that employment across the tillage sector accounts for almost 11,000 full-time equivalents.

Approximately 7,450 people are employed directly, while 3,400 are estimated to be employed indirectly. Overall, this equates to 32 jobs per 1,000ha of tillage.

Tillage and the environment

The carbon footprint of tillage, calculated using the Intergovernmental Panel on Climate Change (IPCC) methodology, is 1.2t of CO2 per hectare.

This footprint is “only 14% of the estimated carbon emissions per hectare of an average dairy system and about 30% of the emissions per hectare for a typical beef enterprise”, according to the report.

The report outlines that tillage land is “essential for biodiversity, especially farmland birds”.