IFA Analysis Shows 73% Increase in Costs at Farm Level in Last Seven Years
At the National Ploughing Championships in Ratheniska, Co Laois today, the IFA Director of Policy Tadhg Buckley has launched a report into the impact of global events such as Covid-19 and the war in Ukraine over the last seven years on the cost of doing business for farmers.
The report shows that the average increase in costs across all sectors from 2017-2023 has been a whopping 73%.
The most impacted sectors, dairy and tillage, incurred total cost increases of 86% and 106% respectively.
During the same time period, farm incomes have dropped by an average of 34%. Tadhg Buckley said that continued cost increases were unsustainable at farm level.
“Our farming sector has to compete in a global market while operating in a very high-cost economy. We also have much tighter and constantly increasing regulation. It is not sustainable,” he warned.
IFA President Francie Gorman said the alarming increase in the cost of farming is something that has to be addressed.
“While the increases reflect inflationary pressures, they also reflect higher compliance costs due to ongoing increases in regulations,” he said.
The drystock sectors have seen somewhat lower levels of increase; however, income levels were at low levels to begin with in these sectors. Any drop in incomes in these sectors further erodes their viability.
“While costs have increased, turnover or total revenue has not kept pace which is one of the core reasons for the decline in income. Reduced output price is not the only reason for the reduction in turnover. Increasing regulatory requirements, which is reducing farmer productivity, is also leading to lower turnover,” he said.
Given the significant pressure on farm incomes, particularly among the vulnerable sectors, it is critical that the Government step up their support to the vulnerable sectors in Budget 2025 to ensure the survival of these sectors.
It is also critical that any support schemes provided to small businesses do not exclude farmers. The most recent The Increased Cost of Business (ICOB) scheme announced as part of Budget 2024 effectively excluded farmers by its design. This is patently unfair as farm businesses are suffering from the same increased costs as small businesses in other sectors of the Irish economy.
Read the analysis in full here.
