1. National Farm Survey 2006 Carried out annually by Teagasc, Ireland’s agricultural research institute. Its primary objective is to collect and analyse information relating to farming activities, with non-farming actives carried out by farming households considered secondary. 1159 farms were surveyed in 2006 out of 113100 farms countrywide.

2. 2006 Results Overall there was a sharp decline in output, and especially in Family Farm Income (FFI) between 2005 and 2006. Average FFI was €22,459 in 2005 and dropped by 25.7% to €16,680 in 2006. Gross output on farms declined by 11% Total input costs declined by 1.2% overall.

3. Reasons for the Decline The predominant reason for the sharp decline in income was a huge reduction in Direct Payments of €4,755 with the switch to the Single Farm Payment (SFP) Scheme. The overall trend when we look over a longer time period is one of steady decline in real FFI, which is no less worrying. Remember that averages hide wide variations across farms of different types and sizes.

4. Reliance on Subsidies Direct payments to farmers include the Single Payment Scheme, REPS, DACAS and forestry payments. Average FFI was only €334 per farm in 2006, the rest of the farms income was derived from direct payments. In 2006, direct payments made up, on average, 98% of farm income, an increase from 94% in 2005. These figures show why farmers have such a vested interest in politics at a national and regional level.

5. FFI, Direct payments and Market FFI by Farm System - 2006

6. Off Farm Income The survey doesn’t include income from non farming activities, it does however stress the importance of considering this fact when interpreting the results. Of farms with low farming incomes, 94% of the farmers and/or their spouses had another source of income. 58% of all farmers or their spouses held off farm jobs in 2006, this is up from 55% in 2005.

7. Profitability in the Farming Sector “On a national basis 66% of gross output was absorbed by total costs in 2006. If direct payments are excluded from gross output, then costs as a percentage of market based value of gross output in 2006 was 99%” This is a worrying trend as it reflects what occurs with rising costs and static output, resulting in deteriorating incomes for the agricultural sector.