Farm investment and debt levels were mixed last year, but a stand-out feature was a 75% jump in investment on tillage farms.

Machinery-related investment appears to have been the driving force behind the investment. It accounted for 64% of investment on tillage farms (€13,059) and between 57% and 69% on drystock farms last year.

Figures from Teagasc’s National Farm Survey show that dairy farms continue to have the highest debt levels, rising 8% to €112,377.

“Dairy farms were more likely to have debt than other farm types, and were also more likely to have higher levels of debt. However, given their comparatively higher income levels, the average debt-to-income ratio of 1.5 in 2019 was much lower than for drystock,” Teagasc said.

Some 47% of dairy farm debt related to buildings, a further 48% was invested in machinery and a final 5% was allotted for land improvement.

Farm debt

Overall, 75% of Irish farms have no debt related to their farms.

Almost 40% of farm debt was classed as long-term with loans lasting over 10 years.

“On average, long-term debt is the most common form of borrowing, with 41% of average dairy farm debt categorised as such,” Teagasc said.

“The comparative figure on cattle other farms was 40% on average, with the proportion on sheep farms a little lower, at 38%.

“Conversely, only 23% of average tillage farm debt was classified as long term, 8% as medium term with 30% short-term (including overdrafts) and the remaining 39% related to leasing or hired purchase.”

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