National farm income is expected to fall by between 5 and 6 per cent this year, according to the president of the Irish Farmers' Association, Mr John Donnelly, who contrasted the decline with the record growth in most other areas of the economy.
Figures compiled by Mr Con Lucey, the IFA's chief economist, show that most of the main agricultural sectors suffered a decline in income in 1997. Average cattle prices had fallen by a further 4 per cent this year. Mr Lucey attributed this to continuing market access problems resulting from the British BSE crisis, which had already led to a drop of about 14 per cent in prices in 1996.
He estimated that milk prices were down by 8 to 9 per cent, due mainly to currency factors. Pigmeat prices had fallen by a similar amount, but the volume of production had increased by 6 to 7 per cent. Sheepmeat prices were reasonably favourable, but the incomes of sheep farmers, particularly hill flock owners, would suffer from a drop of up to 30 per cent in ewe premiums.
Mr Lucey said that 1997 had been "nothing short of disastrous" for grain growers. Cereal prices were down by almost 20 per cent this year and had fallen by close to 30 per cent in two years. These decreases had occurred even before the 20 per cuts being proposed in CAP reforms.
"Overall farm income decline in 1997 would have been worse except for some positive factors. The volume of purchased feed and fertiliser used fell by about 8 per cent and prices were slightly lower also."
A further decline had only been prevented by an expected increase in direct payments of about £50 million, mainly due to green pound compensation and increased uptake of the REPS scheme.
Mr Donnelly said the IFA hoped that the Minister for Finance, Mr McCreevy, would raise confidence in the farming sector by introducing stronger incentives for investment in agriculture through the taxation code and farm development grants.