Financial Pressure Continues To Mount For Fermanagh Farmers

Income for farmers across all sectors is expected to fall by 46 per cent this year, amid poor weather, falling farmgate prices and spiralling costs.

This grim forecast, which has been reported by the Department of Agriculture, Environment and Rural Affairs (DAERA), speaks volumes about the “significant” pressure that local farmers are under.

According to the Department, provisional figures show farm income in Northern Ireland almost halved, from £609m in 2022 to £341m in 2023.

These figures have caused anxiety among local farmers, who have been battling falling farmgate prices and rising costs, amid a backdrop of “the worst year [weather-wise] in living memory”.

According to DAERA, dairying is one of the sectors most impacted by falling incomes.

Ballinamallard dairy farmer, Dale Byers, said that the financial climate is becoming increasingly tough for the sector, which has experienced much volatility in recent years.

“They talk about ‘the three Fs’: feed, fertiliser, and finance,” said Mr. Byers. “The cost of all three have risen substantially in recent years.

“Prices have been volatile across the board. Not too long ago, we were paying £900 a tonne for fertilizer. There was simply no need for it to be that high.

“Granted, costs have fallen, but not to the level they were at before. It is impacting all farm businesses.”

Mr. Byers explained that during the “back end” of last year, the price per litre that he was receiving for his milk didn’t even cover the cost of production.

He added that December last, local dairy farmers walked out of a meeting with a co-op after they were told that low prices would not be increased. A 6p-per-litre increase was announced in response.

“Prices have stabilised, thankfully, but we are still patching over the holes that were dug from low prices last year,” Mr. Byers said.

And while farm incomes have dropped, the UFU also revealed that co-ops – which are the companies that buy milk from farmers for processing – have experienced an 11 per cent increase in profits from last year.

“It’s an absolute kick in the teeth,” said the UFU President, William Irvine.

“In other professions, no-one would stand for this kind of reduction in their annual wages, yet that is what our farm families are now dealing with.”

Mr. Irvine added: “DAERA’s figures are a testament to the volatility of agriculture, how farmers are at the mercy of elements that are out of their control and bigger businesses with plenty of leverage power.”

Agriculture Minister, Andrew Muir, was asked if it was “acceptable” that farm incomes have dropped by such a huge margin.

In a response, Mr. Muir described the income figures as “disappointing”, and added that the decrease “reflects the reduced milk prices from the record high levels of the previous year and the continued elevation in input costs for the agriculture sector”.

He was asked to detail what steps his Department was taking to “support farmers through these difficult financial times”.

However, Minister Muir was unavailable, and a response was instead sent via a DAERA spokeswoman.

“Farm incomes continue to be supported by the provision of substantial direct payments”, the spokeswoman said, adding that payments last year totalled £298million.

Earlier this year, former UFU President and Fermanagh farmer, David Brown, revealed that Northern Ireland’s Single Farm Payment (SFP) budget is to drop by nine per cent this year, in order to fund a Beef Carbon Reduction Scheme.

Minister Muir was also asked if this “cut” was “fair”, given the “tough economic climate” farmers are facing.

Again, a spokeswoman responded on behalf of the Minister.

“Payments are not being cut,” the spokeswoman said. “Rather, funding is being re-directed to fund new farm support measures, specifically the Beef Carbon Reduction Scheme and the introduction of the Suckler Cow Scheme from January, 2025.”

(Source – Impartial Reporter – Farming – William Smith – 08/08/2024)

Farmers see drop in both income and quality of life

AN accountant has said that increased interest rates, farm costs and poor weather are contributing to a “drop in quality of life for farmers”.

Omagh-based accountant and Irvinestown man, Seamus McCaffrey,  said that farmers are currently facing many factors that are having a direct impact on both income and profitability. 

“There has been a drop in income,” confirmed Mr. McCaffrey, who has several farming clients. 

 “In some cases, it’s significant. In other cases, it’s not too significant.

“But, the factors that are contributing to that include changing weather patterns; an increase in bank interest rates, and an increase in farm costs.

“There is, as well, the increase in many cases of farmers using merchant credit, and that is very expensive.”

Mr. McCaffrey continued: “Economically, they [farmers] are making less money.

“There is more working capital tied up, and it’s so significant compared to years ago. The changing weather is making life harder for agricultural contractors.

“There is no particular thing, but when you put all things together, the quality of life for a farmer isn’t as good as it used to be.”

Mr. McCaffrey said that while the current financial climate may make planning for the future difficult for farmers, it is important that they “maintain relationships” with both banks and merchants during tough financial periods. 

“I feel that the key here is the need to maintain relationships with merchants, and the need to maintain relationships with banks,” he explained.  

“To do that, a farmer needs to have very up-to-date financial recording, and in most cases, they need to do a cash flow forecast to see what amount of money is needed to get them over the winter. 

“If they feel they are going to hit their overdraft limit, they need to inform the bank of that in good time, backed by cash flow forecast and up-to-date accounts.

“They also need to know what their tax liability is going to be for January, 2025.”

Mr. McCaffrey said that within farming, “sustainability” is being talked about more and more.  This year alone, the Department is already rolling to help improve productivity and environmental sustainability of the beef sector. 

However, the Irvinestown accountant feels that “financial sustainability” on farms will be an important driver for these schemes. 

“The whole sustainability element is being talked about more, but the key to farming is financial sustainability,” he said. 

“If the farm is making a profit, and is doing well economically, then the farmer will always spend money and do things to make the farming environmentally sustainable. 

“Financial sustainability is key here; it will be the driver.”

(Source – Impartial Reporter – Farming – William Smith – 08/08/2024)

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