ICSA president Patrick Kent has hit out at the methodology Teagasc uses to calculate farm incomes.
It comes following the announcement of the preliminary estimates from Teagasc’s National Farm Survey, this week which showed an increase of 6% in farm incomes in 2015.
Kent said it is important to point out that the National Farm Survey does not account for own labour or owned land costs.
“Other businesses measure profitability after all labour has been paid for; the farm income outlined is actually a payment for all hours worked by the farmer and other family members as well as a return on the investment,” he said.
In this regard, Kent said the methodology has to be taken in context.
He said it disguises the fact that on many cattle and sheep farms, there is no return whatsoever on a substantial investment.
“It hides the fact that most are working for less than the minimum wage and that family labour is being used for free. It also hides the fact that there is an opportunity cost in terms of owned land.
“ICSA is concerned that retailers look at these figures and determine that there is room to keep squeezing the producer price, when in fact, farmers are getting far too little share of the margins from the food chain.
“In practice, the vast majority of farms would generate no income without direct EU supports which are gradually being eroded and these latest figures must be seen in that context,” he said.