Three quarters of Irish farmers remain “deeply concerned” over the price of agricultural inputs, according to Ifac’s Irish Farm Report 2023.
The report, which has been published today (Thursday, February 16), said that the input cost factor – including feed, fertiliser and energy costs – is “overwhelmingly” the main concern expressed among the 1,160 farmers surveyed.
This is the second annual Ifac report in a row in which input costs have been cited as the biggest concern for farmers.
The report – this year titled ‘Championing a Sustainable Future’ – is based on a survey that was carried out between October and December last year.
The 75% of farmers that are concerned primarily over input costs is 10% higher than last year.
Separately, over half (54%) of farmers are concerned over their household electricity and gas costs. Just over a third of farmers have not reviewed their energy provider in the last 12 months, which Ifac said is a “potential missed opportunity when small savings can still be achieved by switching”.
53% of respondents said that they do not actively budget, and 37% have not reviewed their borrowings for their farm businesses in the last 12-18 months.
The report found an appetite among farmers to engage in climate action, but 52% of them said that the biggest barrier to adopting renewable projects is the level of financial investment required, coupled with low returns on that investment.
Notwithstanding that, 41% of farmers said they would be willing to lease out land to a wind or solar project if given the opportunity.
The new Nitrates Action Programme (NAP) for this year contains a number of new measures, including banding, whereby there will be different organic nitrogen rates applied to farms based on dairy cow milk yield.
However, over a third (35%) of farmers surveyed for the Ifac report have not checked how banding will affect them.
According to Ifac, changes to the NAP “are likely to have far-reaching income effects for a large cohort of dairy farmers”.
Farm succession still requires greater attention, the professional services firm said.
Over two thirds (69%) of farm families have yet to identify a successor for their farm. 27% of farmers surveyed said that doubt over the viability of the farm is the main hurdle to succession planning.
A related point of concern is the Fair Deal Scheme (or Nursing Home Support Scheme), which 90% of farmers say they have limited or no understanding of.
Other key figures from the report include:
- General:
- 56% of farmers have a positive outlook for 2023, with 74% planning to still be farming in five years;
- 40% would consider organic farming.
- Financial:
- Fuel and transport costs were a key concern for 51% of farmers;
- 57% are worried about regulations and bureaucracy;
- 48% say cost is the biggest barrier to introducing more technology on-farm;
- 22% complete budgets or forecasts on a monthly or quarterly basis.
- Succession:
- 60% of farmers have a structured pension plan in place;
- 44% say that carrying on the family name is not a factor in determining a future successor.
- Employment:
- 44% of farmers with employees agree to wages in net terms;
- 32% struggle to find available employees, which is cited as the main obstacle to attracting talent;
- Only 33% of farm employees have contracts of employment in place.
Welcoming the Ifac Farm Report 2023, Minister for Agriculture, Food and the Marine Charlie McConalogue said: “Our great sector is facing a period of challenge, as highlighted in Ifac’s report, from rising inflation to environmental concerns.
“However, it is promising to also see that well over half of Irish farmers remain positive about the year ahead.”
John Donoghue, chief executive of Ifac, commented: “There is no denying that farmers have experienced serious cost increases in 2022, so it is encouraging to see that more than half of our survey respondents are optimistic for the coming year, with three quarters planning to still be farming in five years’ time.”
He added: “While the recent nitrates derogation changes are not without challenges, there are also opportunities, in areas like organics and, hopefully, renewables.
“Owing to fears about farm viability, succession planning is still being put on the back burner. However, in our experience, with the right financial advice and planning, a viable option can be identified to help future-proof farm businesses,” Donoghue said.