Farm incomes will increase by around 16 per cent over the next three years, research economists working for Teagasc, the agriculture and food development authority, have predicted.
However, a second paper presented at the Outlook 2000 Conference in the RDS, warned farmers that unless they responded to the new agricultural and economic climate, they could face an income drop of between 30 and 70 per cent by 2007.
The first analysis presented to the conference predicted that after 2003, income was likely to level out and by 2007, income in nominal terms would be similar to 1998 levels.
The economists presenting this analysis - Mr Kieran McQuinn, Mr Trevor Donnellan and Mr Julian Binfield - said that with an average inflation rate of 3 per cent per year, by 2007 real national farm income would be down by over 20 per cent.
However, when the expected decline in farmer numbers is taken into account, average income per farm would be at around the same level as in 1998.
Reforms of the Common Agricultural Policy would lead to a 10 per cent drop in the value of agricultural output by 2007. But, said the paper, this would be compensated for by an increase of almost 25 per cent in EU subsidies, which in 2007 would account for 72 per cent of total farm income.
The ability of farmers to respond to the new policy and economic climate would largely dictate the incomes of individual farmers.
In a separate paper, Teagasc economist Ms Thia Hennessy said that inability to meet these challenges could mean a drop in farm income of between 30 and 70 per cent over the next seven years.
She predicted that all farmers would be subjected to a price-cost squeeze. The value of farm output would remain constant but fixed costs would increase by around 20 per cent.