Farmer Borrowing Doubled in Past Five Years

21 November, 2002

Borrowing by farmers have almost doubled in the past five years, from €1.6billion in 1995 to €3.1billion in 2001, and bank interest €payments now account for over 10% of farm income.

Sean Regan, Chief Environment Adviser with Teagasc, told the Teagasc National Dairy Conference in Killarney that net new investment in farming last year was equivalent to one-quarter of farm income.

"While dairy farms now account for less than 30% of farms they contributed well over 50% of total new investment in 2001. Almost 80% of dairy farmers made capital investments last year, compared to just 36% of cattle farms," he said.

Sean Regan said that the implementation of existing pollution control legislation and the application of new measures such as the EU Nitrate Directive will impose further investment pressures on farmers, particularly those at the commercial end of the industry.

"New systems of wintering and effluent management, such as outwintering pads, earth bank tanks and integrated constructed wetlands, are currently being evaluated by Teagasc researchers. The interim results of our research on these innovations are promising. However, it is too early to give a definite recommendation on these alternative systems or to say whether they will ultimately be approved by the environment regulatory authorities," he said.

He said that these new systems have the potential to cut investment costs and allow farmers to put facilities in place which will enable consolidation and expansion of their business.

"Based on an analysis of wintering and effluent storage facilities for a 100 cow herd, the cost over a 10 year period of conventional housing and storage facilities ranges from €700 to €850 per cow. The equivalent cost of outwintering pads is €220 to €390 per cow. A similar variation in costs would apply for other herd sizes," he said.

The Teagasc specialist said that outwintering pads, as an add-on to existing facilities, could have an important role to play on many dairy farms.

" Where tax allowances and building grants can be maximised, the conventional housing systems have still a lot to offer. They are more durable in the long term and contribute more to the asset base and value of the farm," he said.

The complete proceedings from the National Dairy Conference are now available. Click here.