Family farm incomes fell by over a quarter last year, according to the National Farm Survey published today.
The figures compiled by Teagasc, the State agricultural research and advice agency, show a fall of €5,779 to €16,680 - a 25.7 per cent decline on 2005.
Despite the decrease, farm incomes still show a 7.2 per cent increase compared to 2004.
Following reform of the EU's Common Agricultural Policy (CAP), direct payments fell by €4,755 but increased as a proportion of farmers' income to 98 per cent.
The survey showed that income for full-time farmers, who account for around a third of the those surveyed, fell by 15 per cent to €34,486.
President of Irish Creamery Milk Suppliers Association Jackie Cahill said the average income for a full-time farmer - €34,500 - was more than €8,200 less than that in the civil service.
Dairy farms form 56 per cent of full-time farms, with tillage accounting for 8 per cent and drystock 36 per cent.
The average income for all part-time farms was €7,899 in 2006, down from €11,372 in 2005.
Since subsidies were "decoupled" from production under CAP reform, dairy and tillage were the only types of farming that achieved a net income from the market place.
Liam Connolly, head of the National Farm Survey team, said: "It is clearly evident that market output for the drystock systems is not sufficient to cover production costs and that a major contribution of direct payments is needed to make up the shortfall."
Dependency on off-farm income continues, with 82 per cent supplementing income through farmers and/or their spouses receiving money from employment or social payments.
On 58 per cent of farms, the farmer and or the spouse had an off-farm job, up 3 per cent on 2005.
Teagasc noted that income on specialist dairy farms participating in Rural Environmental Protection Scheme is higher than on similar farms not participating.
The survey did not cover pig and poultry farms.