Farm incomes increased by 27 per cent last year, with average farm incomes reaching €21,500, according to the Irish Farmers' Association (IFA).
The association's Farm Income Review 2011, an economic and statistical analysis of farm income, said the single farm payment and other direct payments accounted for over 70 per cent of farmers' incomes.
The report said food exports will continue to benefit from the weak euro in 2012. However, the agency warned about the impact of the global economic slowdown on the food sector, which is highly dependent on exports.
Speaking at the publication of the report, IFA chief economist Rowena Dwyer said while the weak euro is providing a welcome competitiveness boost for agri-food products, economic uncertainty could impact on prices this year.
Irish food exports have been boosted by high commodity prices over the last year, leading to a huge increase in exports in terms of value, as well as volume.
“The turmoil in the financial markets is having an erratic impact on commodity markets, with no clear price pattern linked to supply-demand balances," said Ms Dwyer. "In addition, the lower revised growth forecast for the UK market in late 2011 is a cause for concern as over 40 per cent of agri-food exports go there.”
The 2011 review also found signs of increased capital investment in the sector, with a slight increase in borrowing and deposits by those working in the agricultural sector during the year.
However, delays in payments continued to be an issue in 2011, the agency said, particularly for state agri-environment schemes, such as REPS (rural environment protection scheme) and AEOS (agri environmental options scheme).
The number of farmers with other incomes has decreased in the last few years in tandem with the economic downturn.
According to a recent Teagasc National Farm Survey, 51 per cent of farm households had an off-farm job in 2010, down from 58 per cent in 2007.
The agri-food sector has been one of the strongest performers of the Irish economy, with farmers benefitting from high prices for their product, in what is a traditionally cyclical industry.
