In yesterday’s Irish Times I went ‘head to head’ with Michael Ring, a Fine Gael member of the Irish Dáil (legislature). I was putting the case for transparency in public expenditure on farm subsidies and Michael was arguing against. He made the claim that transparency in the CAP will “will give a clear indication of income of each farming household”. To be fair, nobody is arguing for the disclosure of farm incomes, just for the disclosure of the amount of government handouts to each farm. But could it be that the two figures are rather similar? And what does that mean for the economic viability of farming in Ireland?
Another article in the Irish Times earlier in the month pointed to new official figures showing that on average in 2007, “subsidies accounted for 71 per cent of farm profits” in the Republic of Ireland.
“Statewide €1,843.2 million was paid in subsidies and agricultural income (operating surplus) came to €2,596.8 million.”
In other words, for every three euros of profit earned in the market, the EU and the Irish state add a further seven euros in subsidy. The north and west regions (which specialise in sheep) were more reliant on subsidies than the south and east regions (which specialise in cattle, dairy and cereals). In the midlands region, net subsidies accounted for 105.4 per cent of farmers’ profits. In other words, in this region, subsidies account for the whole of farm income AND cover the losses made by the businesses. Not far behind is the west region, where subsidies account for 90 per cent of farm income. Since these figures are averages they are sure to conceal large variations between farms within the same region.