Average annual farm incomes increased by 44.4 per cent to €22,459 last year, it emerged today.
However, a study revealed family farm income was still less than three-quarters of the average industrial wage in 2005 despite a steep rise from the 2004 figure of €15,557.
Teagasc's National Farm Survey found the increase was a result of a change in EU policy to a decoupled premium system, which led to a once-off gain, and that incomes will decline to more traditional levels in 2006.
Irish Farmers' Association President Padraig Walshe warned farmers and the general public not to get too excited about the exceptional increase in 2005.
"The average farm income was still only about €22,500," he said. "Secondly, the survey itself is not representative of all farms, and thirdly, the trends for 2006 show that national farm income this year will be back to its 2004 real level."
Mr Walshe said the Teagasc data excludes the intensive sectors of agriculture - pigs, poultry, horticulture and horses - that account for about 20 per cent of national agricultural output.
These sectors are not covered by direct payments and their incomes did not increase at all in 2005, he added.
The survey, conducted by Teagasc Rural Economy Research Centre, revealed that the income generated from the marketplace actually declined last year.
The average income farmers received from the marketplace, excluding direct payments, was only €1,360 (6 per cent of farm income) in 2005, a decline of 32 per cent compared to the market income of €2,010 in 2004, the survey found.
On full-time farms, the portion of farm income generated from the market was €8,759 on average.