A presentation delivered by Cathal Buckley from the Teagasc Rural Economy and Development Programme at last week’s Teagasc hill sheep conference discussed the sustainability of hill sheep farms. Cathal said that evaluating the sustainability of a farm system requires an assessment of how economic, environmental and social dimensions interact.

He said that for a farming system to be deemed sustainably resilient, it needs to be consistently performing across all three dimensions. If one of these components falls short, then it brings into question the long-term sustainability of the farm.

Environmental indicators

Hill sheep systems excel in terms of their environmental credentials. Cathal presented the preliminary data outlined in Figure 1. Hill sheep farms have the lowest greenhouse gas emissions (IPCC basis) per hectare, measured at approximately 70% of those produced on lowland sheep and cattle farms and just 35% of the levels on dairy farms.

Ammonia emissions are also the lowest of all livestock farms. Production levels are running in the region of 70% of the levels on lowland sheep farms, 55% of levels on cattle farms and 26% of the level on dairy farms. On top of this, hill sheep farms have the lowest nitrogen surplus per hectare. This measures how much nitrogen is left in the system after nitrogen leaving the farm in outputs such as livestock, milk or forage is taken from the nitrogen inputs brought on to the farm.

Economic indicators

While hill sheep systems excel on the environment front, it is a different story when assessed economically. Figure 2 details the profitability of land, which is measured as the gross margin per hectare, income per labour unit and measure of farm viability. The stats are derived using the 2018 National Farm Survey analysis.

Hill sheep farms recorded the lowest gross margin/ha, coming in just behind cattle systems. This position was flipped when it came to income per labour unit. Cathal said this relates to the amount of family farm income, including direct payments generated per unpaid labour unit. Sheep and cattle systems compared poorly to dairy and tillage systems, with cattle farms falling behind hill and lowland sheep systems, which were equal.

Cathal explained that a farm is defined as viable where family labour is remunerated at a greater than or equal level to the minimum wage and there is sufficient income coming into the system to provide an additional 5% return on non-land based assets employed on the farm. Hill sheep systems were again on a par with lowland, ahead of cattle systems and a long way short of tillage and dairy, as expressed in Figure 2.

Social indicators

Three components are used to measure social sustainability – household vulnerability, isolation risk and age profile (see Figure 3). The trend is similar for economic indicators, with dairy farms strongest on this dimension, followed by tillage, then sheep and cattle systems. A household is described as vulnerable if the farm business is not economically viable in the measures already discussed and the farmer or their spouse has no off-farm income or employment source.

At 43%, hill sheep farmers pose the greatest concern for household vulnerability, followed closely by cattle and lowland sheep systems. Cathal says the isolation risk is assessed using a binary variable based on if the farmer lives alone or not. In the region of just over 20% of hill sheep farmers fall into the isolation risk category, with cattle farmers faring worst.

With regards to high age profile, farms are defined as having a high age profile if the farmer is over 60 years of age and there are no members of the farm household younger than 45. Hill farmers fared relatively well, with just over 30% judged to have a high age profile, lower than lowland sheep, cattle and tillage enterprises.

Report methodology

The data presented by Cathal is based on preliminary results for 2018. These indicatorsform part of the wider Teagasc sustainability reporting process, with the annual report taking account of a much wider range of variables. The finalised report will be published later in the year and the most recent 2017 report is available on the Teagasc website.

Data for the reports is collated through the National Farm Survey (NFS), which is a representative sample of about 900 farms across Ireland. The sampling group is restricted to farms with in excess of €8,000 of standard output, or in a sheep context, equivalent to about 55 ewes. There are 41 hill sheep farms in the NFS sample and with population weighted, these represent 3,537 hill sheep farms nationally.

Environmental management

Improved water quality and biodiversity outcomes were highlighted as the next priority measures. Cathal says this shows the high regard that farmers place on environmental management, which is also possibly linked to hill sheep farmers seeing these as areas that they can have a meaningful effect on improving.

Recoupling of payments was the lowest priority area, ranking well below all other options.

Hill sheep priorities for CAP reform

The top area selected by hill sheep farmers for funding under the impending CAP reform is generational renewal. This was also mentioned by Cathal in his presentation.

It stemmed from a survey asking farmers to rank their priorities for the next CAP reform, which was carried out as an addition to the 2018 Teagasc National Farm Survey.

Farmers were asked to rank a number of potential future priorities on a scale of one to five, where one is to strongly disagree and five is to strongly agree.

The results, which are detailed in Figure 4, show that generation renewal was viewed as high priority, with a score of 3.9 out of five.

Generation renewal is defined in many CAP-related forums as going beyond solely bringing in younger blood to the sector. It also looks out for farmers that are incorporated into a sustainable farming system and providing the necessary supports to make this happen.