Farm sustainability is comprised of three pillars; environmental, social and economic sustainability. Labour and working time play an important role in detemining the latter two elements of farm sustainability.
Teagasc tracks economic sustainability in the National Farm Survey (NFS) by categorising farms as either viable, sustainable or vulnerable.
The factors determining which of these categories a farm falls into depends largely on farm income and whether the farm household has a source of off-farm income.
Viable farms
A farm business is defined as being economically viable if the family farm income generated is enough to pay family labour at minimum wage, as well as providing a 5% return on non-land farm assets.
The minimum wage is set at €13.50 this year, equating to an annual wage of €24,300 for a full-time labour unit when assuming 1,800 hours are worked across the year.
Farms with relatively high sales revenues and scheme payments may not necessarily be deemed viable if labour input and/or spending on non-land assets, such as machinery and buildings, are also high.
On the flip side, farms with relatively modest incomes may be classed as viable if labour requirements are low and investments are kept modest relative to income levels.
The latest Teagasc NFS results are those for 2023, which classed just 28% of farms as viable, while in the better farmgate price year of 2022, the equivalent figure stood at 43%.
Some 53% of dairy farms, 35% of tillage farms, 11% of suckler farms, 28% of cattle finishers and 16% of sheep farmers fell into the category of viable in 2023’s NFS.
Sustainable farms
For years when farmers see a downturn in farm income, an off-farm income in the household can keep a farm sustainable when it does not meet the viability criteria outlined above.
An off-farm job or pension can top up the income generated through participation in schemes and farm sales.
The majority of suckler farms find themselves in this category in successive years of the NFS, as well as over 40% of farmers in the sheep, tillage and cattle sectors in 2023.
Three in every five farm households see either the farmer or their spouse working off-farm, and this metric is fairly even across sectors.
However, a key difference to emerge when splitting the dairy sector away from the drystock sectors when looking at off-farm employment is whether the off-farm job is held down by the farmer or their spouse.
It is these sources of off-farm income, whether received by the farmer or their spouse, that keep tens of thousands of drystock farms from falling into the classification of vulnerable
While a majority of dairy farm households have off-farm employment, the job is held by the farmer in just 11% of the sector’s farms.
Around half of all suckler farmers, cattle finishers, sheep farmers and tillage farmers held down an off-farm job themselves in 2023.
Furthermore, almost one-third of all farm households in the country were in receipt of at least one pension in 2023.
Sucklers was the sector with the highest proportion of farm households receiving a pension.
It is these sources of off-farm income, whether received by the farmer or their spouse, that keep tens of thousands of drystock farms from falling into the classification of vulnerable.
Vulnerable farms
A farm is classed as economically vulnerable when it does not meet the threshold of viability and neither the farmer nor their spouse has a source of off-farm income.
Almost one in every three farms in the country were categorised as vulnerable in the challenging year of 2023, rising to nearly 40% for suckler and sheep farms.
The dairy sector, which generally fares well on measures of economic sustainability, still saw 22% of farms classed as vulnerable for that year, many multiples of the equivalent figure in the better milk price year of 2022.
Labour and income
Hours worked and off-farm employment are factors determining whether a farm is classed as economically viable, sustainable or vulnerable, but also whether it ranks well on social sustainability.
Dairy sees the highest levels of farm viability of any sector, but the average farmer put in around 20 extra hours of work per week into farm jobs than the average drystock farmer did in 2021-2023.
The average dairy farm received an input of 1.43 family labour units in 2023, while all other sectors came in below a single labour unit in the NFS calculations.
However, the gap in average weekly hours worked between the dairy and drystock sectors does narrow to just 10 hours per week when off-farm working hours are factored in.
The impact of high hours worked on family farm income is demonstrated in the average dairy farm income coming to €49,432 in 2023 but dropping to a median of just €29,283 in income on a work unit basis.
Similarly, 2022’s bumper year for milk sales and income saw average dairy incomes hit €149,000, but when unpaid family labour is accounted for, income dropped to €92,514 per labour unit.
A farm is viable if it can pay family labour at minimum wage and generate a return from non-land assets.A sustainable farm household cannot generate this level of returns from farming, but does have an off-farm income source to top up farm income.A farm’s labour input should be taken into account when assessing its economic sustainability, as a farm with high income may see the income.While dairy farmers generally score well on economic sustainability, the same cannot be said for some metrics of social sustainability, such as the number of hours worked weekly.
Farm sustainability is comprised of three pillars; environmental, social and economic sustainability. Labour and working time play an important role in detemining the latter two elements of farm sustainability.
Teagasc tracks economic sustainability in the National Farm Survey (NFS) by categorising farms as either viable, sustainable or vulnerable.
The factors determining which of these categories a farm falls into depends largely on farm income and whether the farm household has a source of off-farm income.
Viable farms
A farm business is defined as being economically viable if the family farm income generated is enough to pay family labour at minimum wage, as well as providing a 5% return on non-land farm assets.
The minimum wage is set at €13.50 this year, equating to an annual wage of €24,300 for a full-time labour unit when assuming 1,800 hours are worked across the year.
Farms with relatively high sales revenues and scheme payments may not necessarily be deemed viable if labour input and/or spending on non-land assets, such as machinery and buildings, are also high.
On the flip side, farms with relatively modest incomes may be classed as viable if labour requirements are low and investments are kept modest relative to income levels.
The latest Teagasc NFS results are those for 2023, which classed just 28% of farms as viable, while in the better farmgate price year of 2022, the equivalent figure stood at 43%.
Some 53% of dairy farms, 35% of tillage farms, 11% of suckler farms, 28% of cattle finishers and 16% of sheep farmers fell into the category of viable in 2023’s NFS.
Sustainable farms
For years when farmers see a downturn in farm income, an off-farm income in the household can keep a farm sustainable when it does not meet the viability criteria outlined above.
An off-farm job or pension can top up the income generated through participation in schemes and farm sales.
The majority of suckler farms find themselves in this category in successive years of the NFS, as well as over 40% of farmers in the sheep, tillage and cattle sectors in 2023.
Three in every five farm households see either the farmer or their spouse working off-farm, and this metric is fairly even across sectors.
However, a key difference to emerge when splitting the dairy sector away from the drystock sectors when looking at off-farm employment is whether the off-farm job is held down by the farmer or their spouse.
It is these sources of off-farm income, whether received by the farmer or their spouse, that keep tens of thousands of drystock farms from falling into the classification of vulnerable
While a majority of dairy farm households have off-farm employment, the job is held by the farmer in just 11% of the sector’s farms.
Around half of all suckler farmers, cattle finishers, sheep farmers and tillage farmers held down an off-farm job themselves in 2023.
Furthermore, almost one-third of all farm households in the country were in receipt of at least one pension in 2023.
Sucklers was the sector with the highest proportion of farm households receiving a pension.
It is these sources of off-farm income, whether received by the farmer or their spouse, that keep tens of thousands of drystock farms from falling into the classification of vulnerable.
Vulnerable farms
A farm is classed as economically vulnerable when it does not meet the threshold of viability and neither the farmer nor their spouse has a source of off-farm income.
Almost one in every three farms in the country were categorised as vulnerable in the challenging year of 2023, rising to nearly 40% for suckler and sheep farms.
The dairy sector, which generally fares well on measures of economic sustainability, still saw 22% of farms classed as vulnerable for that year, many multiples of the equivalent figure in the better milk price year of 2022.
Labour and income
Hours worked and off-farm employment are factors determining whether a farm is classed as economically viable, sustainable or vulnerable, but also whether it ranks well on social sustainability.
Dairy sees the highest levels of farm viability of any sector, but the average farmer put in around 20 extra hours of work per week into farm jobs than the average drystock farmer did in 2021-2023.
The average dairy farm received an input of 1.43 family labour units in 2023, while all other sectors came in below a single labour unit in the NFS calculations.
However, the gap in average weekly hours worked between the dairy and drystock sectors does narrow to just 10 hours per week when off-farm working hours are factored in.
The impact of high hours worked on family farm income is demonstrated in the average dairy farm income coming to €49,432 in 2023 but dropping to a median of just €29,283 in income on a work unit basis.
Similarly, 2022’s bumper year for milk sales and income saw average dairy incomes hit €149,000, but when unpaid family labour is accounted for, income dropped to €92,514 per labour unit.
A farm is viable if it can pay family labour at minimum wage and generate a return from non-land assets.A sustainable farm household cannot generate this level of returns from farming, but does have an off-farm income source to top up farm income.A farm’s labour input should be taken into account when assessing its economic sustainability, as a farm with high income may see the income.While dairy farmers generally score well on economic sustainability, the same cannot be said for some metrics of social sustainability, such as the number of hours worked weekly. 
SHARING OPTIONS