Farmers Plan to Invest More in 2006

Irish farmers plan to invest a total of €612 million in their farms in the current year, based on responses from 1020 farms participating in the Teagasc National Farm Survey. Farmers planned investment in 2006 was 71 per cent higher than the planned investment for 2005.

But if the pattern of understating investment plans, as farmers did in 2005, is repeated, then the actual farm investment could be in the region of €1 billion, according to Anne Kinsella, who is responsible for carrying out the survey.

At individual farm level, the average planned investment is €26,240, compared with planned investment of €15,291 a year ago.

The reintroduction of the farm waste management scheme and concerns with compliance regulations has resulted in higher planned expenditure on buildings. Planned investment in farm buildings increased from €167 million for the 2005 year to €261 million in 2006.

For 2006, farmers plan to invest €85 million on machinery. In the past, farmers have always understated their planned investment in machinery, as they did again last year. The planned investment was €105 million, whereas the actual investment was €288 million.

Teagasc Researcher, Anne Kinsella said: “The survey showed planned investment in land for 2006 at €242 million. But again this figure could be exceeded, because farmers planned to invest just €42 million in land last year whereas the actual investment in 2005 was €125.”

The substantial increase in planned land investment between 2005 and 2006 could be due to several factors, including Compulsory Purchase Orders (CPO) on land for road building and lands sold for development.

“With premium prices received for these lands and sites sold, farmers are in a position to invest substantially to replace this land,” Anne Kinsella suggests.

Investment in milk quota was €24 million in 2005, compared with projected investment of €29 million. The planned investment is lower this year at €16 million.

The Rural Environment Protection Scheme (REPS) and the introduction of REPS3 had a positive impact on actual and planned investment in buildings. Demand for housing facilities and waste storage facilities will increase as more farmers continue to join the Scheme.