Ireland could have as few as 10,000 dairy farmers by 2015 and only 8,000 of these would be viable, a major report on the impact of a World Trade Agreement (WTA) has found.
The Teagasc Rural Economy Research Centre report predicted an overall further decline in viable farms and an increase in the incidence of part-time farming and reliance on EU subsidies in the year 2015.
Researchers found that just 6 per cent of cattle farms and 17 per cent of tillage farms would be economically viable by 2015 as a result of the changes which are being predicted because of WTA.
It also found that up to 13 per cent of cattle producers and 35 per cent of tillage farmers could increase their income by using their land only to claim the new decoupled farm payments.
One of the findings showed that there could be a significant number of farming households which will be economically vulnerable because the farm business was not viable and there was no other income source in the household.
The researchers estimated this could be as high as 15 per cent of dairy farming households, 21 per cent of cattle farming households and 27 per cent of tillage farms.
One of the joint authors of the report, Dr Fiona Thorne, said the report, which focused on the impact on farmers from a world trade deal on agriculture, was not all gloomy news.
"A large number of what we would term economically non-viable business may be sustainable due to the presence of other incomes in the farm household. We looked at that whole area and believe that 70 per cent of cattle farmers and nearly half of tillage farmers in Ireland will have an off-farm job by 2015."
Asked if Ireland would maintain its national agricultural output from the fewer farms operating, she said this could happen if there were policy changes.
"There is no doubt that there will be fewer farms and major policy changes are required to facilitate the changes in structure which will be necessary to maximise farm viability- issues such as resource mobility. One of these is the milk quota system and the mobility of land and land sales and usage," she said.
Dr Thia Hennessy, the other joint author, said that the dairy sector would be very badly hit by the abolition of export subsidies which would cut the price being paid to farmers for their milk.
"The average gross margin per cow is expected to fall by over 40 per cent as a result of WTO reform and this is likely to have serious consequences for producer numbers," she said.
The importance of export subsidies to the typical Irish dairy farmer was evident in this analysis, she said. The results showed that following the abolition of export subsidies, even if a typical farmer could double production within their existing resources, this increase in production would still be insufficient to maintain current income levels.