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Minister Coughlan launches Agriculture and Food Annual Review and Outlook 2005/2006

2005 - A year of Successful Transition for Irish Farming

The Minister for Agriculture and Food, Mary Coughlan T.D., today announced the publication of the Annual Review and Outlook for Agriculture and Food 2005/2006.

The Minister said "2005 was a year of successful transition for the farming sector with the introduction of the Single Payment Scheme. Total direct payments amounted to €2,280 million - the highest amount ever in the history of Irish farming".

As a result, aggregate farm income reached a record level of €2,765 million. The increase in direct payments reflected a once-off overlap in direct payments as farmers received over €1 billion under the Single Payment Scheme as well as payments due on the old premia schemes and rural development measures such as REPS, Compensatory Allowances and forestry premia.

The Minister said "The central point that is apparent from the Annual Review is the broad reach of the sector. The agri-food sector is a hugely important constituent of the national economy. Farming provides direct and indirect employment, it still forms the mainstay of rural development, it protects and enhances the environment, and it is central to the country's EU and international policy. The Annual Review reflects the level of importance and the broad reach of the sector?"

She added "The agri-food processing sector is one of our most important indigenous industries. Agri-food exports reached a record level of €7.5 billion, with dairy and beef exports up 8% and 6% respectively".

Overall the agri-food industry continues to be one of Ireland's most important indigenous industries. In 2005, it accounted for 8.6% of gross domestic product (GDP) and 8.5% of employment and exports. The regional distribution of the agri-food processing sector is also crucial for maintaining employment and growth in rural areas.

The Minister said "The National Farm Survey data indicates that in 2004 - 36% of farmers had off-farm employment. While 78% of farmers or their spouses had some source of off-farm income be it from employment, pensions or social assistance".

The Minister emphasised that despite concerns about the exit rate from farming land sales remain at historically low levels and prices continue to rise - there is no evidence of the so-called 'flight from the land. Many farmers see a good future in their sector; they are continuing to invest in their farms with gross fixed capital formation up 7% in 2004. There was a very significant increase in investments in farm buildings.

The Minister said "while 2005 was an exceptional year in many respects, the farming sectors will face challenges on certain markets in 2006. Market forces are having a stronger influence on the price paid for milk but the dairy premium, which was incorporated into the SPS last year, is being increased to 3.6 cent per litre. Beef markets are at the highest levels in many years and tight supplies in the latter half of the year should help maintain prices".

The Minister pointed out that expenditure by her Department will be over €3 billion in 2006, with increased provisions for a range of measures including REPS, forestry and on-farm investment measures. Also, there are increased provisions for agricultural research in line with the commitments in the Action Plan to encourage further research and development in the agri-food industry. In conclusion, the Minister said that one of the major issues for 2006 is whether or not the WTO negotiations are concluded this year and she emphasised that the direct payments to farmers have to be protected in any outcome to those negotiations.

The report is available in both English and Irish on the Department's website at: Annual Review and Outlook 2005/2006 (pdf 1,558Kb)  or Athbhreithniú agus Forbhreathnú Bliantúil 2005/2006 (pdf 1,735Kb) 

7 June, 2006

Date Released: 07 June 2006