It has become much more difficult to get a handle on what is happening financially in Irish farming.

While Teagasc carries out its annual national farm survey, which gives an excellent picture of what’s happening at individual farm level, the work that the Central Bank used to do in giving a broad sectoral overview of debt levels and deposits is much less visible than it used be. However, trends can be identified.

The first is the overall variation in farm income as measured by the Central Statistics Office (CSO).

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It will come as no great surprise that the variation from year to year is really large, far larger than for any other sector of the community.

The CSO puts the operating margin for the entire sector for the most recent five years at €3.2bn for 2020, €3.7bn in 2021, €4.8bn in 2022, €2.7bn in 2023 and €4.3bn in 2024.

But while some farmers have invested about half a billion in land purchases and about a billion in farm improvements, what is striking is the steady decline in bank borrowing and debt levels.

As we come up to the end of 2025, the overall debt level of the sector (food processing is not included) will be about €2.6bn.

Back in 2010, total farm debt stood at approximately €4bn. So in terms of debt levels, we are seeing the lowest levels of debt in Irish farming for 25 to 30 years.

The conclusion has to be that farmers have become much more cautious in their personal financial management, a conclusion which is borne out by digging into the figures that are available for the money held in deposits and current accounts by farmers.

The best estimate for these is that they have grown from hovering around €3bn from 2005 to 2015 but are expected to reach over €6bn by the end of this year.

The fact that this money is earning very little says, in my view, that the sector is either starved of enterprising young people which is visibly true when you look at the age profile of Irish farmers or that even among those successful older farmers, there is a new reluctance to invest. 

The main driver of investment has been the dairy sector since the abolition of quotas in 2015. Given the relative margins in dairying compared with every other enterprise, as well as future prospects for the sector, this is not surprising.

But the uncertainty around the derogation and future environmental policies is clearly making farmers hesitate in undertaking what, in other circumstances, would be logical commercial decisions. What is missing in this analysis is the best course in the national interest.