Subsidies now account for half of farm incomes

SUBSIDIES accounted for 47.3pc of agricultural incomes in 2017, a CSO study has found.

The publication highlights the continuing importance of subsidies to Irish farmers, and particularly to the regions associated with beef and sheep production.

The importance of direct payments to farm incomes — or what the report terms “the operating surplus of holdings” — varied across the country, the CSO analysis showed, ranging from a low of 33.8pc in the southwest (Kerry and Cork) to a high of 71pc in the midlands (Laois, Offaly, Longford and Westmeath).

The report illustrates the extent to which dairying has reduced farmers’ dependence on direct payments.

Along with the southwest, the other dairy heartlands of the south- east (Waterford, Wexford, Kilkenny and Carlow) and the mid-west (Limerick, Clare and Tipperary) had the lowest dependence on direct payments at 40.5pc and 41.5pc of income respectively.

These regions have also seen an overall decrease in their dependence on subsidies since 2015 — although this trend is likely to rebound in 2018 due to the collapse in dairy farmer incomes.

For example, in the southwest subsidies accounted for 38.5pc of operating surplus on farms in 2015, but this fell to 33.8pc in 2017.

A similar trend was seen in Dublin and the mid-east (Kildare, Louth, Meath and Wicklow), with subsidies accounting for almost 46pc of farm incomes in 2015, but just 42.3pc last year.

In contrast, farmers in the west (Galway, Mayo and Roscommon) and border regions (Donegal, Sligo, Leitrim, Cavan and Monaghan) remain largely dependent on subsidies.

In 2015, subsidies accounted for 65.7pc of incomes in the west, but this figure increased to 70.1pc in 2017. Subsidies accounted for 55pc of farm incomes in the border region in 2015, with this figure rising to 58.2pc last year.

The study confirms that the greater southern region — which comprises the south-east, south-west and mid-west — remains the powerhouse of Irish agriculture. This region produced almost 55pc of farm output, 72pc of milk output and used 52pc of inputs.

Total output from agriculture grew from €7.4bn to €8.4bn between 2016 and 2017. Inputs increased from €5bn to €5.25bn in the same period, with the operating surplus jumping from €2.64bn to €3.46bn.