EU direct payments to farmers accounted for 90 per cent of average income from all farms last year, the latest Teagasc figures have shown.
This was a dramatic rise from 72 per cent of average farm income in 2001, according to the agriculture and food development authority.
The figures, which showed a 5.8 per cent decline in overall farm income last year to €14,925 from €15,840 in 2001 also recorded a 10 per cent drop in income for full-time farmers.
The income decline resulted from a drop of over 2 per cent in the value of output. It also found that farm production costs increased by 3.5 per cent.
The figures showed that the 44,500 full-time farmers had an income of €27,758 from their land-based activities, a drop of 10 per cent on their income for the previous year.
As in previous years, the survey showed an enormous variation in incomes between the larger dynamic full-time farmers and the smaller part-time group who are highly dependent on direct payments and off-farm employment.
Mr Liam Connolly, head of the Teagasc National Farm Survey, said full-time farms, which account for 40 per cent of all farms, represented the more dynamic, commercial sector of farming.
About 60 per cent of these were involved in dairying, with the balance involved in tillage, beef and sheep production.
The remaining 60 per cent of farmers had an income from farming of just €6,590 in 2002. The majority were part-time beef/sheep farms and 82 per cent of these had another source of income.
The Teagasc survey showed that on 48 per cent of farms, the farmer and/or spouse had an off-farm income. On 35 per cent of farms, the job was held by the farmer, an increase of 2 per cent on 2001.
The largest income decline took place on dairy farms. Average dairy income was €28,100, a drop of 18 per cent on 2001. The survey is based on an analysis of farm accounts from a sample of almost 1,200 farms, representing a total of 116,400 farms.
Income in tillage farming declined by 9 per cent to an average of €21,900. Larger tillage farmers suffered an income decline of up to 23 per cent, it showed.
The average income from beef increased in 2002, albeit from a very low base, and incomes from cattle rearing systems increased by 7 per cent to an average of €7,750, while incomes from other beef systems increased by 22 per cent, to an average of €9,520.
It also found that incomes in sheep farming, at €12,350, were 2 per cent up on 2001, probably due to a continuing shortage of sheepmeat in Europe because of the Foot and Mouth crisis of 2001.
However, on both beef and sheep farms last year, direct payments (cheques in the post) accounted for 100 per cent of farm income. In tillage, because of lower yields due to bad weather and reduced prices, direct payments accounted for 110 per cent of farm income, i.e. farmers were selling their grain at below the cost of production and had to use 10 per cent of their payment to maintain income.
The survey, which is regarded as the most accurate of all farm surveys and is the basis for farm planning by Government, found that on dairy farms, direct payments accounted for 33 per cent of farm income, up from 22 per cent in 2001. Income figures became a major point of argument between farmers and the Department of Agriculture and Food during the tractor protest to Dublin in early January.
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