With beef and lamb at or approaching record price levels, and the outlook positive for grain this harvest, cattle, sheep and arable farms should record higher incomes in 2021.

But analysis of the provisional farm income figures for 2020 released by DAERA last Thursday again highlights the extent to which these farms rely on direct payments to remain viable.

The DAERA estimates across all sectors relate to a sample of around 350 farms, with incomes presented for those at a size greater than 0.5 of a standard labour requirement (SLR).

In other words, these are farms with livestock or crops sufficient to require at least 18 hours of labour per week.

Figures from the 2018 census suggest that there are only just over 10,000 farms in NI at this size, or above. The majority (nearly 15,000) have an SLR below 0.5.

The average cattle and sheep farm in the Less Favoured Area (LFA) would lose around £8,000

While it is unfair to compare directly across incomes in each sector as the farms are not of a consistent size (cattle and sheep farms tend to be lower-stocked and in the sample have an SLR around 1, compared around 3 in dairy), we can look at incomes versus direct payments.

In their 2018-2019 farm incomes report, DAERA published the average direct payments for each category of farm. Without direct payments in 2020, the average arable farm in the sample would be losing around £6,000.

The average cattle and sheep farm in the Less Favoured Area (LFA) would lose around £8,000, while cattle and sheep in the lowland (who have the lowest farm incomes of all) would be losing over £5,000.

Only in dairy and the intensive sectors are sustainable incomes usually made without direct payments.

Logic would therefore suggest that if government gradually takes away this support, it will inevitably drive more farmers towards dairy, pigs, poultry, etc.

Given the environment challenges we face going forward, and the need to become less reliant on imported feed, that would be a perverse outcome.

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