Half of Irish farmers concerned about future – 9 out of 10 farmers want to reduce carbon footprint on farms

Today, ifac, the farming, food, and agribusiness professional services firm, is releasing the findings of its annual, national Farm Report. These insights are a combination of ifac collated financial data and results of the most comprehensive farmer survey ever conducted in Ireland.

Ifac’s 2020 Farm Report combines the views of almost 1,500 Irish farmers with a comprehensive analysis of the financial data from over 2,500 sets of its clients’ 2019 farm accounts, and an analysis of emerging trends from over 22,000 sets of farm accounts over four years.

Key takeaways

Succession

• One in every two farmers surveyed are concerned about their farm’s future
• 9 out of 10  have no definitive farm succession plan in place
• I in every 3 farmers avoid the issue as they believe their business is not viable enough and would not encourage the next generation to take it on. 

Financial planning

• Just over half of farmers have a private pension plan
• Over 1 in two farmers started contributing to their pension in their twenties

Business of farming

• Just 1 out of 2 don’t prepare cash-flows or budgets
• Of those respondents that don’t prepare cashflows, 43% cited that they don’t have enough time to complete and over a quarter don’t have the financial ability or understanding.

Environment

• 9 out of 10 farmers want to reduce the carbon footprint on their farms, via renewables, carbon capture and storage, and use of alternative fertilisers, etc.
• 9 out of 10 farmers support the ringfencing of an Agri sector carbon tax for farm initiatives
• 7 out of 10 farmers support a specific renewable energy grant to enable more sustainable energy use on their farms.

Farmer wellbeing

• Almost 1 in 4 of Irish farmers don’t do anything to look after their mental health and wellbeing
• Those that do, cited exercise, talking to others, participating in Discussion Groups, eating well, having interests outside of farming, taking breaks and holidays, and having regular health checks.

John Donoghue, Chief Executive of ifac said:

“Each year our report gives us a snapshot of what it’s like to be an Irish farmer. It’s certainly not easy being a farmer in 2020. The whole industry has been hit by a very challenging period and, just like last year, many farmers are increasingly worried about the future. Brexit is still looming and the impact of Covid-19 is now evident across some sectors. A predicted fall in milk prices and markets being put on hold is affecting dairy farmers. Beef farmers have been hit with the temporary closure of major Irish buyers, less beef being produced, and confirmed Covid-19 cases at meat-processing plants.

“On the one hand, our findings mirror some of these difficulties, but on the other hand, they demonstrate the resilience of Irish farmers and their hopes for the future. For example, half of the respondents are concerned about their farm’s future. A staggering 84% have no definitive succession plan in place. Conversely, others want to ensure the long-term sustainability of the industry with 93% wanting to reduce their carbon footprint, and 73% supporting the use of more sustainable energy on their farms.

“What’s clear this year is that farmers have a long, tough road ahead. Many sectors will need new plans, and many farmers will need the continued support of their external advisors, with specialist sector knowledge, to help them on this journey.

“At ifac, we will continue to anticipate their needs and provide the advice and support needed to help them face the challenges ahead. For example, in response to last year’s report, we focused on growing our succession advisory team, and we developed a new technology-aided management service, called FarmPro, to help our clients improve farm viability, make better decisions, and more profit.”

Irish Farm Report – Key Takeaways

Dairy Profits Average dairy farmer made a net profit, before other farm income, of €948/ha in 2019 [2018 profit €804/ha]	Dairy Cost Average costs per litre decreased by 6.7% mainly driven by a reduction in feed costs, which reduced by 21% YoY (Whole farm/ha basis)	Dairy Top 25% The top 25% of dairy farmers made a net profit, before other farm income, of €1,735/ha
Beef Profits Average beef farmer made a loss, before other farm income,  of €101/ha[2018 loss of €116/ha]	Beef Stat 66% of beef farmers made a net profit before other farm income of €251/ha	Beef Top 25% Top 25% of beef farmers made a net profit before other farm income of €251/ha
Sheep Sector Average sheep farmer made a loss before other farm income of €144/ha. After other farm income was included, a net profit of €337/ha was achieved	Tillage SectorAverage tillage farmer made a profit of €153/ha before other farm income. When other farm included a profit of €591/ha was achieved.	Environment93% of farmers were willing to take actions on farm to lower carbon footprints while 91% felt that carbon tax collected from Agri sector should be ringfenced for farms.
Succession84% of farmers have no definite succession plan in place with over 1/3 of farmers having no will.  Over 1/3 are avoiding Succession as they believe business is not viable.	Cashflow & BudgetsOver ½ the farmers surveyed do not complete a cash-flow or budget. Interestingly, over ¼ of these farmers cited lack of financial ability & understanding as the reason why not completed.	Financial Planning22% of farmers have no household personal life cover in place with 34% of these respondents belonging to the 55-64 years category.

More about ifac’s farmer survey

• The farmer survey is conducted across all sectors and aspects of farming
• 90% of respondents are male, almost 30% are aged 45-54, and over two-thirds farm full-time
• Close to 70% are sole traders
• The sector with the strongest representation is beef, followed by dairy (at over a third).

About ifac

• Ifac is 45 years in business providing specialist advice to the farming, food and agribusiness community – it has been at the heart of agriculture and food since 1975
• It is a co-operative owned, professional services firm operating from more than 30 locations across Ireland, with more than 400 people serving 19,000 clients nationwide
• It specialises in tax advisory, accountancy, pension planning, succession planning, and a myriad of other financial services, which help clients to build profitable and sustainable businesses
• Ifac is Ireland’s ninth-largest accountancy firm by turnover and largest by number of clients
• For more information see www.ifac.ie.