How does agricultural income compare to the ‘industrial wage’?
This year has been tough for farmers, as recent figures from the Central Statistics Office (CSO) show the value of Irish agricultural output at farm-gate prices fell by 2.9%.
Estimates from the CSO show that the value of cattle output decreased by by 2.1% or €51m, while the value of milk produced declined by 6.2%, even though milk intakes increased by 4.7%.
But what does this mean for agricultural income?
The CSO estimates that all of the farms in Ireland generated a total income of €2,149.4m in 2016 – an increase of 5.3% or €107.8m year-on-year.
Basing this on the last available figure from the CSO, which shows that there were 139,600 farms in Ireland, it brings the average income across all farms to almost €15,470.
This figure represents the agriculture income generated across all Irish farms, irregardless of enterprise, and it excludes earnings generated from off-farm employment.
When compared to the ‘industrial wage’ or the average annual earnings from 2015, it shows the stark differences between the income generated by agriculture and other sectors.
Subsidies boost farm incomes
Despite the estimated fall in the value of agricultural output, the total agricultural income generated is predicted to increase.
The CSO estimates that agricultural income will be up by 5.3% or €107.8m this year on 2015 levels. Meanwhile the agricultural operating surplus is expected to jump by 3.5% or €88m year-on-year.
The rise in operating surplus in 2016 can be attributed to an increase of 16.9% in the value of net subsidies and a decrease of 1.6% in the value of total intermediate consumption, which was mainly driven by the lower cost of fertilisers and energy.
The value of other subsidies less taxes on production is estimated to have increased by 10% from €1,402m in 2015 to €1,542m in 2016, figures from the CSO show.
The increase is mainly due to a number of new direct payment schemes, which started in 2015, becoming fully operational in 2016.
However, the CSO also says that expenditure on retail feedstuffs increased by 3.7% to reach €1,366m.