Tillage producers were told yesterday that one in three of them would be better off drawing down their EU cheques and ceasing production under the reforms of the Common Agricultural Policy.
Ms Fiona Thorne, a Teagasc economist, said that unless the members of this group, who are the least efficient of the cereal sector, increased productivity or diversified, they would be better off taking their €365 per hectare and quitting.
She told Teagasc's National Tillage Conference in Carlow that her analysis showed these farmers were currently making a loss in the marketplace and were "eating into" their annual entitlements from the EU to cover production costs.
She warned the 500 farmers who attended the annual conference, the last before the CAP reforms come into being on January 1st next, that if there were no changes in production patterns, the average tillage farm income would drop by 7 per cent by 2012.
She said her findings were in contrast to the results of a recent Teagasc survey on farmers' attitudes towards the new CAP policies, which indicated that the majority of farmers felt that complete decoupling of production from supports would not affect their production systems or profits.
She told the cereal farmers that if they increased productivity or changed their farming systems they could dramatically improve their incomes in the future.
The options for them, she said, would be to change their crop mix, join the Rural Environment Protection Scheme or switch to rearing cattle, which they would be entitled to do under the terms of the Fischler reforms.
Such changes, she said, would benefit farmers and increase their income by as much as 70 per cent by the year 2012.
Giving the farmers what she called "a wake-up call", Ms Thorne said now was the time for those who wished to stay in business to make plans for the years ahead when the new regulations would come into place.
Ms Thorne said that the average entitlement of €21,526 for tillage farmers from the EU was the highest of all farm systems.
The reform of the policy, she said, was a positive move if farmers planned for the future.
"It presents as many opportunities for the cereal farmers as it does disadvantages," she said.