Belfast Telegraph

Friday 31 October 2014

Farmers milking it as incomes soar

Incomes vary across sectors with dairy farmers expected to earn £63k annually

A hike in the price of milk has been hailed as the reason income from Northern Ireland's farming industry soared by a third in 2013, according to new data.

Agriculture made £298m for the economy last year, a £75m uplift on the take for 2012, according to the Department of Agriculture and Rural Development.

A boost in the value of milk, a subsector of the industry which is by far the most popular form of farming here, was behind much of the boost despite the volume of milk produced remaining unchanged.

But despite the improving fortunes, the figures show farmers here are still heavily reliant on Brussels to remain profitable.

The European Union paid farmers £259m in 2013 as part of the Single Farm Payment, an annual subsidy paid on an acreage basis.

Without the payment, which comes under the Common Agricultural Policy (CAP), the industry would have made just £39m.

Its reliance on Brussels is an issue which hasn't gone unnoticed by Agriculture Minister Michelle O'Neill (below).

"The importance of CAP support in the farm income figures is clear, with Single Farm Payments accounting for 87% of total income," she said. "With every reform of CAP, the threat of reductions in direct payments grows and I believe we must work to improve the long-term competitiveness of our industry in order to reduce our exposure on this front."

Still, the boost to farm incomes is impressive, particularly after the difficult weather conditions faced by farmers through the year.

Output in every sector, from milk to beef to pigs to sheep to poultry, increased during the year with total output topping £1.9bn, up 10% on the year.

Rising costs, which have been eating into margins over the last few years, were also an issue but to a lesser extent this year. The total cost of production was £1.5bn, up by 9% on the year.

The improving picture meant farm business reported a healthy increase in income on the year.

Across all farm types it is expected to reach £30,976 in 2013-14, up £11,640 on the year. Incomes for cereal farmers are expected to fall because of lower grain prices, ironically a factor which will benefit livestock farmers.

Incomes vary across sectors with dairy farmers expected to bring in £63,000 and lowland beef and sheep farmers expected to bring in just under £16,000.

The farming minister said these relatively buoyant times should be used as a time to help plan for a future where EU payments may dwindle.

"As the industry gets back on track, we need to turn our attention to the longer-term challenges and opportunities that lie ahead. It is time to begin to take a more farsighted view on where we as an industry are and where we want to go."

Executive support vital for growth

By Harry Sinclair

Things did not get off to a good start last year, farm incomes had dropped by over 50% in 2012 and farmers were faced with one of their biggest challenges as margins were hit hard with possibly the worst snow storm that Northern Ireland has experienced in over 60 years.

However, the good summer and mild autumn/winter weather definitely helped to alleviate some of the damage caused and that combined with increased farm gate prices for our main commodities has helped the industry to recover from what was a very difficult and trying time for many. According to the figures, the estimated value of the 2013 Single Farm Payment equated to £259m which accounts for 87% of the total income.

This really emphasises the importance of the Single Farm Payment to farmers and exemplifies that the marketplace alone would not deliver the proper returns to producers.

Therefore, it is vital that under the next CAP reform, CAP support is targeted at productive agriculture which is something the UFU has been pushing for under the new CAP arrangements. In addition, if we are to grow the industry by 60% to £7bn by 2020 and meet the ambitious targets set out within the Agri-food Strategy Board's 'going for growth' report, additional support from the Northern Ireland Executive will also be crucial going forward.

Harry Sinclair is Ulster Farmers' Union president

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