Farmers take stock as era of single EU cheque approaches

Any suggestion that farmers will be able to take their EU cheque, put up their feet and retire to a life of luxury following …

Any suggestion that farmers will be able to take their EU cheque, put up their feet and retire to a life of luxury following the decision to cut the link between subsidies and production was firmly discounted yesterday down on the farms.

For people such as Mr Gordon Johnston (51), who runs a beef and sheep farm near Tyrrellspass, Co Westmeath, the new system he will face from January 1st, 2005, presents a lot of challenges.

He quickly dismissed the idea that the single cheque he will receive in 2005, irrespective of whether or not he produces any food, would have the capacity to keep himself and his wife in any kind of comfort into the future.

"I am afraid that that cheque is far below the average industrial wage, and there is still the obligation to keep the farm in good agricultural condition to qualify for that payment.

READ MORE

"I believe that the devil could be in the detail, because we do not know what that will entail. However, there is one certainty: fixed costs will continue to rise."

Mr Gordon farms 150 acres on which he runs 200 ewes and has a herd of 50 suckler cows. His wife works off-farm.

His farm is used by Teagasc, the agriculture and food development authority, as a benchmark for what other farms involved in sheep production should be doing.

"I am going to have to wait and see what will happen after 2005, and it may mean moving deeper into beef production and cutting back on the sheep, or the other way around.

"I believe in producing quality animals, and I may reduce stocking levels to increase quality, even though this could damage the grassland quality.

"In the end, quality and the market will determine the future, but I am glad we will be getting away from a situation where the price of an animal can drop by as much €50 in a week."

The decoupling decision has created real difficulties for Ms Noreen Callinan, who farms 70 acres near Abbeyleix, Co Laois.

She milks 42 cows on the farm, which has a 50,000-gallon milk quota, and fattens about 10 bullocks each year.

"I am now faced with the situation of having to expand to survive because the compensation payments, which I expect will not cover the expected fall in income."

Her farm, regarded as one of the more efficient small dairy farms, has been built up to its present level by hard work and low-cost production. "All the indicators are that we will have to get bigger to survive, and that will be very difficult to achieve.

"Milk quota is very expensive and land virtually impossible to buy in this area. There is going to be a very dramatic fall in the price we receive for milk, and I see difficult times ahead.

"The compensatory payments are unlikely to cover that fall in milk price, so we have to think about expanding to stand still."

She said that herself and her husband, Patrick, who works off-farm, had been "doing all right" financially up until now, but major decisions would have to be made following the dairy decoupling decision which comes into force in 2005.

Ms Callinan and her husband, who have three school-going children, feel it would be unlikely that they could double their quota to 100,000 gallons on their farm.

"It makes for a very uncertain future, but we will try and work it out as best we can," she said.