‘Expansion plans will be challenged if farmers aren’t getting the necessary returns’
Last year, 35% of farmers in Ireland made less than €10,000 and – even in a record year – 30% of dairy farmers made less than €50,000. Tadhg Buckley, AIB head of agriculture, said at today’s Agricultural Science Association (ASA) From Trade Wars to Consumer Trust conference.
Although the low levels of debt on Irish dairy farms are seen as a positive, Buckley noted that this has arisen from two reasons – Ireland’s history of inter-generational transfer of land, along with farmers not being able to make enough to justify borrowing.
In addition, the Cork native stressed that focusing on moving up the value chain in terms of premium and grass-fed products that can differentiate on the marketplace is key.
However, he said: “We have to be cognisant of the fact that if the primary producer isn’t getting the necessary return then all our plans on growth and expansion will be significantly challenged.
“We all know about the obvious threats like Brexit, but I think the income challenge is one of the biggest challenges we face as a sector.”
When it was put to Buckley that the Irish dairy industry would be made up of far fewer and much bigger dairy farms in the future, he said: “At the moment, the average herd in Ireland is about 75-80 cows.
“If the average herd increases by 50%, you’re still at a 120-cow dairy farm. You’re still essentially one central farmer surrounded by hired staff and contractors.”
He added: “We need to make sure that we are getting the best levels of return from the product that we have. I do think dairy will expand and numbers will go up.
“I don’t see us going away significantly from the core family farm structure that is there because I still think that the 100-cow dairy farmer in 10 years time would still be able to give a return if we can continue to grow the levels of efficiency and there’s plenty of scope for that.”