The unbalanced and poorly supported business risk that farmers across rural Ireland take on was laid bare this week. At the Tullamore Farm Suckler & Sheep Open Day, we detailed the financial performance the sheep and suckler farm delivered in 2023.

Over 2,200 suckler and sheep farmers streamed through the gates to see what is happening. On the same day, Teagasc released National Farm Survey results for 2023 showing that farm incomes were down 57% on average to €19,925.

Thirdly, also on Tuesday, KPMG delivered a report commissioned by the Irish Farmers Journal, showing the hugely significant economic cost of current Irish and EU policy on the Irish food and farming sector.

At the open day, Adam Woods and Darren Carty presented figures showing that the mixed suckler and sheep enterprise delivered a gross margin of over €1,250/ha in 2023.

Net margin, when typical fixed costs and a basic payment of €286/ha are included, comes in close to €750/ha for 2023.

One of the key messages to farmers is that it is possible to achieve this high level of economic and technical efficiency while also improving the environmental sustainability of the farm.

In recent years, the farm has focused on reducing chemical nitrogen use (92kg/ha while growing 12 tonnes DM/ha), increasing clover content in swards, and driving breeding technologies to further improve animal performance.

All of these technologies are shown to deliver a triple dividend to the business – economic, social and environmental.

The economics we have discussed above. The social is the network of suppliers and local businesses working with farm manager Shaun Diver on the farm. The environmental piece is the improving soil and hedgerow carbon sequestration.

Crop diversification on parts of the farm further increases the protein produced, so it can be ensiled and used in the winter rather than be purchased from other parts of the world.

Farm survey

The Teagasc 2023 National Farm Survey results showed clearly the collapse in farm incomes in 2023. The report states that lower farmgate prices, depressed levels of production and high costs were the primary factors behind the income cut.

For the second year in a row, farm income has taken a heavy blow.

KPMG

What’s the objective of the report the Irish Farmers Journal commissioned KPMG to undertake? Since our last report three years ago, the Irish Government has established regulations that mean the farm sector must cut greenhouse gases (GHG) by 25%.

EU policy is dictating that the nitrates directive is reducing stocking rate, and schemes like organics have been strongly funded.

Emissions mitigation measures that farmers are taking will only get the sector part of the way, so ongoing further herd cuts are a reality.

The one line summary according to KPMG is that the economic cost to the sector is in the order of €3 billion per year. In terms of job losses, KPMG suggests it’s something like 29,000 less jobs per year in food and farming across rural Ireland.

So what do the Tullamore Farm, National Farm survey and the KPMG results mean?

Ultimately, what Tullamore Farm shows is that with the right policy framework, farmers can respond to the challenge of reducing national emissions, but also the global challenge of feeding a rising population.

Viability

However, climate targets for the sector need to be deliverable without undermining the economic viability of the family farm.

It is not possible for any business to invest in going green if policy measures force it into the red, as we see from the national farm survey results.

The axing of the straw chopping scheme is a case in point for the tillage sector.

Setting idealistic targets and rolling out ‘pop up’ schemes will not achieve long term sustainability.

The financial impact of the results of the KPMG report are so significant that the Government cannot credibly continue to implement a reduction policy for the sector without coming forward with a clear financial and policy plan as to how farmers are going to be supported in delivering it.

This report and its implications should be front and centre as politicians go to the country over the coming months.

Hopefully politicians, policymakers and farmers will use the KPMG figures to influence change.

It is clear now where the debate needs to be. We need to know the Government’s plan to reduce the environmental footprint of producing food in Ireland while protecting economic viability.

What are the key policies and realistic targets that deliver this? It is clear from the KPMG report that the current road is not the right one.

We can dream, aspire and hopefully deliver new science to further increase emissions reductions. However, hopes and aspirations are no way to support incomes in rural Ireland and farm families.