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Payments and income from farming in the Western Region

As discussed in the last blog post on farmers in the Western Region, agriculture is an important sector of Irish economy and particularly important to the rural economy and society.  In this post different measures of payments and income are examined using three different sources.  Data on CAP beneficiaries is available at county level, showing how much is received in each county, while the recently published Revenue data for 2016 provides information on average Farming Income and Gross Income for the ‘farming cases’.  Finally, the National Farm Survey, conducted by Teagasc, provides detailed information on farming income.

Each of these sources is measuring different things for different purposes so it is useful to compare them to add to our understanding of farming in the Western Region.

 

Payments from the CAP.

The Common Agricultural Policy (CAP) contributes a significant amount to the local economy.  In 2016 more than €525m was received from the CAP by the 54,215 beneficiaries in the Western Region (Table 1) with an average of €9,689 per recipient in the Western Region.

Table 1: CAP beneficiaries in the Western Region in 2016

Source: DAFM CAP Beneficiaries Database

Galway (€ 135m) and Mayo (€105m) had the highest receipts and also had the highest numbers of recipients, while Leitrim (€35m) and Sligo (€37m) had the lowest total receipts.  However, when the average receipt is considered (Figure 1) the pattern is different.

Figure 1: Average received by CAP beneficiaries in the Western Region

Source: DAFM CAP Beneficiaries Database 2016

Average receipts in 2016 were highest in Clare (€10,945), Galway (€10,292), and Roscommon (€10,050), but these were still among the lowest in the country (Clare has the 17th highest average receipt, and average receipts in Galway and Roscommon were 20th and 21st of the 26 counties). The four lowest average payments in the country were in the Western Region with Sligo the lowest in the country.  In contrast, the highest average receipts were in Dublin (€19,062 and which has a very small number of beneficiaries (867)) and in the South East with €17,806 the average in Waterford, €17,205 the average in Kilkenny and €16,194 the average in Carlow.

The very significant different in receipts between the Western Region and the South East reflect both farm size, and the enterprise type.

 

Farm Incomes- Revenue Data

In addition to information about numbers of farming cases, data is available from Revenue for both average Gross income and average Farming Income.   The data for Revenue cases from farming is from the Revenue Statistics and Economic Research Branch publication ‘The Farming Sector in Ireland: A Profile of Revenue Data’ available here.

In 2016 nationally there were 137,109 ‘farmer’ cases with an average Farming Income of €21,952.  There were 40,709 ‘farmer’ cases in the Western Region with an average Farming Income of €13,338.  Data for each of the Western Region counties is shown in Figure 2 below.

Figure 2: Average Farm Income by county- Revenue data

Source: The farming sector in Ireland: A profile from Revenue data, 2016 data, published 2018

The lowest average Farm Income is in Leitrim (€10,679), while the highest was in Clare (€16,701), but the seven Western Region counties are the seven counties with the lowest average Farm Income nationally.  Waterford has the highest average Farm Income (€35,026), followed by Kilkenny (€32,408) and Kildare (€32,292)

Interestingly, for farmer cases the Revenue also provides information about the average Gross income.  This includes income from other sources (the two most significant of these are PAYE income from employment and income from other business sources). It therefore includes income from off farm work.  It should be remembered that where couples are jointly assessed this includes the earnings of both.

Figure 3: Average Gross Income and average Farm Income in Western Region counties –revenue data

Source: The farming sector in Ireland: A profile from Revenue data, 2016 data, published 2018

Non farm income is very significant in the Western Region, accounting for most of the income in the farming cases in the Western Region indicating the importance of off farm employment in farming households.

The National Farm Survey

The final source of data on farm income is the National Farm Survey (NFS) which has been conducted by Teagasc on an annual basis since 1972.  The survey is operated as part of the Farm Accountancy Data Network of the EU and fulfils Ireland’s statutory obligation to provide data on farm output, costs and income to the European Commission. A random, nationally representative sample is selected annually in conjunction with the Central Statistics Office (CSO).  In 2016 the sample of 861 farms which represented 84,736 farms nationally.  Pig and Poultry farms are not included in the survey.

Data from the NFS is not available at county level, but Figure 4 below shows the Family Farm Income[1] for 2016 for each of the NUTS 3 regions.

Figure 4: National Farm Survey Family Farm Income by Region, 2016

Source: Teagasc, 2017, National Farm Survey 2016

The Border and the West regions, which account for six of the seven Western Region counties have the lowest Family Farm Income in 2016.  Clare is part of the Mid West region.

Comparing the data.

As Family Farm Income from the National Farm Survey is not available at county level, it is useful to compare the data on CAP beneficiaries and from Revenue tax cases at regional level.  Figure 5 shows the three different payment and income measures for the NUTS 3 regions.

In most regions, except the Border (and it should be noted the NFS does not include pigs and poultry which are concentrated in the Region) the Family Farm Income is the highest figure, while the average Farm Income for Revenue is lower.  As expected, given that it is only one of the elements of farm income, CAP receipts are lower than either income figure.

Figure 5: DAFM receipts, Revenue average Farm Income and NFS Family Farm Income 2016 by Region

Source: Teagasc National Farm Survey, 2016; The farming sector in Ireland: A profile from Revenue data, 2016 data, published 2018; DAFM CAP Beneficiaries Database2016

 

In the Border, Midland and the West Region in particular, the CAP receipts are a higher proportion of income figures, indicating the greater contribution of the subsidies to income in these regions.

Conclusions

While these three different measures are derived from different sources they are all consistent.  The West and Border have lowest income and lowest average CAP benefit as well as lower taxable income from farming.  The pattern of farming is different in these regions, with different enterprise types, smaller farm sizes and greater reliance on off farm income.  Yet farming in these regions is integral to their rural economy, the rural landscape and CAP payments and their multipliers make a significant contribution the local economy.  These are all important considerations when negotiating the next CAP.

 

 

Helen McHenry

[1] Family Farm Income represents the return from farming for the farm family to their labour, land and capital. It does not include non-farm income.  See here for more information.

How many farmers are in the Western Region?

Agriculture has traditionally been a very important sector of Irish economy and this, along with the subsidies from the Common Agricultural Policy (CAP), has meant that it is also one of the most measured sectors in the economy.

We would therefore expect to have a very good idea how many farmers are in the Western Region and it can be argued that we do.  However, because there are a variety of ways in which a person farming or receiving income from farming may be defined, there is no single definitive answer.  Instead the numbers depend on what is being measured.

In this post I look at three different measures of ‘farmer’ in the Western Region (the seven counties under the WDC remit), and discuss why there is so much variation among them.  The Census of Population was held in 2016, and this provides one measures of those involved in farming, data on CAP beneficiaries for 2016 provides another measure and recently released Revenue data for 2016 provides the third statistic.

In 2016 in the Western Region there were 20,880 people whose occupation was ‘farmer’ according the Census of Population (see Fig. 1), while there were 40,709 Revenue ‘farmer’ cases (see discussion below) and 54,215 CAP Beneficiaries.

Figure 1: Three measures of ‘farmer’ numbers in the Western Region 

 

Source: CSO Census of Population, 2016, Profile 11  Employment Occupations and Industry, Table EB049; Revenue Statistics and Economic Research: The Farming Sector in Ireland: A Profile from Revenue Data Statistics Update2018, Table 5; DAFM CAP Beneficiaries 2016 database. Western Region totals are own calculations

 

There are clearly very significant differences among these three measures, so what do they mean in terms of numbers in farming?

 

The Census of Population 2016

The smallest measure of farmer numbers in the Western Region is from the Census of Population in 2016.  The number of famers in this Census is based on detailed occupational data for those who have described their main occupation as ‘farmer’.  This is one of 328 categories and nationally ‘farmer’ is the second largest occupation group accounting for 3.5% of the work force.  As noted the numbers here refer to farmers rather than those working in agriculture or in other areas who are part of the broader category of Farmers fisheries and forestry workers (22,733 people in the Western Region).

The most important thing to note for this measure of ‘farmer’ is that those categorised here are only those who consider their main occupation to be farmer.  Those with other work who farm on a part time basis or for other reasons do not consider farming to be their main occupation are not included here.  The decision as to what is their main occupation is made by the person filling in the census form.

Figure 2: Excerpt from 2016 Census of Population form

Source: CSO https://www.cso.ie/en/census/2016censusforms/

Revenue Cases: Farming

The data for Revenue cases from farming is from the Revenue Statistics and Economic Research Branch publication ‘The Farming Sector in Ireland: A Profile of Revenue Data’.  The first report was prepared in 2015 to add to the evidence available on the agricultural sector in Ireland from both an economic and taxation perspective.  Data tables in this report are updated annually with the most recent available for 2016 published in August 2018.  Both are available here.

The 2015 report provides the detailed explanation of the ‘farmer cases’ included.  There were three methods of identifying farmers on Revenue records:

  • Form 11 tax returns, filed annually by self-assessed Income Tax payers which include a check box for farmers.
  • Revenue codes its taxpayer register by NACE code and the agricultural related sectors (0-190) can be identified.
  • Through a data exchange with the Department of Agriculture, Food & the Marine (DAFM), Revenue receives information on the recipients of agricultural payments (such as the single farm payment). This information is linked to Revenue records.

Farmer cases are any of those which meet one of the three criteria noted above (a case may meet all three but is counted once).  The majority of farmers are self-assessed income tax payers and as such are required to file a Form 11 return of income for each tax year.  The file covers the vast majority of farmers in receipt of DAFM payments. Most are registered with Revenue as self-assessed individuals. Some cases hold PAYE registrations only, effectively employees within the farming sector. There are also a small number of incorporated farmers, registered for Corporation Tax.

In addition to information about numbers of farming cases, data is available from Revenue for both average Gross income and average Farming Income.  In 2016 nationally there were 137,109 ‘farmer’ cases with an average faming income of €21,952.  There were 40,709 ‘farmer’ cases in the Western Region with an average farming income of €13,338

 

CAP Beneficiaries

Data on CAP beneficiaries is drawn from the Department of Agriculture, Food and the Marine (DAFM) database.  This provides information on all farmers or companies who received money under CAP in 2016.  This is a broad definition, including all kinds of CAP payments and the database provides the names and municipality of those who received more than €1,500 in that year.   This includes a number of companies but these must fall within the definition of active farmers (see here for a more detailed discussion of active farmer definitions).

Nationally, 133,182 received CAP payments in 2016, with a total of €1,614m received, an average payment of €12,121.  In the Western Region in the same year €525m was paid to 54,215 beneficiaries, an average payment of €9,689.

 

What do the categories tell us about farmers in the Western Region?

Clearly the three categories of ‘farmers’ discussed above are all defined differently.  The census definition is the strictest, these are people whose main occupation is farming and if they do have another occupation it is of lesser importance.  The second category includes all of those making Revenue returns in relation to farming income, but this may not be their main income source.  They may have other earnings but they are in some way involved in farming in the Region.  The final category of ‘farmer’ is the CAP beneficiaries.  In the Western Region this is the largest group, taking in all those who have received a CAP payment.  Some of these may not be making Revenue returns and may only be receiving very small payments (a significant number of CAP beneficiaries receive less than €1,500 annually).  This final, largest, group is likely to include all of those with some connection to farming and may be categorised as ‘active farmers’

In contrast, nationally there were more Revenue farming cases than there were CAP beneficiaries, in other words, more had farming income for the purposes of taxation than were in receipt of CAP payments.  The Revenue farming cases includes a variety of income sources associated with farming and so this may be part of the explanation for this.

Nationally, 52% of those claiming CAP payments declared their principal occupation as ‘farmer’ on the Census, compared to 39% in the Western Region indicating that, as we know, more farmers in the Western Region have main occupations other than farming and are farming part time.  Revenue farming cases are 103% of CAP beneficiaries nationally while they are 75% in the Western Region.  For both of these, it should be noted that Revenue cases may not be a complete subset of the CAP beneficiaries, in other words not all Revenue cases for farming will be CAP beneficiaries, and vice versa.  Both nationally and in the Western Region about the number of those who consider farming to be their main occupation is about half the number of Revenue cases (51%).

Farmers in Western Region Counties

The three measures of ‘farmer’ numbers discussed above are available at county level (Figure 2).  Again the highest measure in each county is CAP beneficiaries, followed by Revenue cases and as would be expected the lowest number is those who declared their principal occupation as farmers on the Census of Population in 2016.

Figure 3: Farmer numbers in Western Region counties

Source: CSO Census of Population, 2016, Profile 11  Employment Occupations and Industry, Table EB049; Revenue Statistics and Economic Research: The Farming Sector in Ireland: A Profile from Revenue Data Statistics Update2018, Table 5; DAFM CAP Beneficiaries 2016 database.

The disparity among these three measures varies among counties, as it did between figures for the State and the Western Region as discussed above.  In the Western Region those with a main occupation as ‘farmer’ (Census of Population)  as a proportion of CAP Beneficiaries was lowest in Leitrim (26%) and Mayo (35%) counties (in all Western Region counties the number of CAP beneficiaries was higher than the number of Revenue cases). Clare, has the highest number with the main occupation ‘farmer’ at half the number of CAP beneficiaries and Sligo (43%) was the next highest.

 

So, how many farmers?

So in measuring how many farmers there are in the Western Region, we need to decide what we mean by a farmer.  Is it someone who considers being a famer their main occupation? Or someone who has some farming income which is declared to the Revenue, or someone who receives a CAP payment?

In this post different farmer definitions and numbers have been discussed giving us insight into different measures and some of the sector characteristics.  In the next post on this topic different measures of income will be considered.

 

Helen McHenry

Farmers in the West are getting older

The age profile of farmers in the Western Region is changing. Farmers are getting older and by 2010 for each farmer under 35 there were more than 10 farmers over 55 years of age. This changing age profile has implications for the type and amount of output from farms in the West.

The most recent Census of Agriculture[1] (2010) shows that more than half (56%) of the farmers in the Western Region (31,467) were over the age of 55, with 30% of these over 65 years of age (see Fig. 1). There is a higher proportion of farms in the older age categories now than in the last two decades. In 1991 50% of Western Region farmers were over 55, but by 2000 this had fallen to 44% before increasing again in 2010. While the number of Western Region farmers past retirement age is significant (16,838) the age profile of farmers in the region is similar to that in the EU where 30% of farmers are over 65 and only 10% under 35.

Figure 1: Farmers in the Western Region by Age Category, 2010

pie age fers2 15.04.15

 

There were only 2,999 (5%) farmers aged under 35 in the Western Region in 2010 and fewer younger farmers now than in either 2000, or 1991 (the previous agricultural censuses) when farmers under 35 made up 11% of farmers in the region (Fig. 2).

 

Figure 2: Age Categories of Farmers in Western Region 1991 to 2010

 combi bar age fers15.04.15

Farmers in the Western Region have tended to be older than those in the rest of Ireland (in 1991 43% of farmers in the rest of Ireland were over 55 compared to 50% in the Western Region) but the pattern of change is very similar with fewer farmers in the Rest of Ireland in older age categories in 2000 (37% in Rest of Ireland, 44% in Western Region) and in 2010 when 48% in the Rest of Ireland were aged 55 years and older and 56% in the Western Region.

As mentioned in a previous post, much of the structural change in agriculture occurred between 1991 and 2000, and this was associated with older farmers leaving agriculture and increased opportunity for younger famers to take over farm holdings. There has been less change in farm numbers and size since then and numbers in the older age categories have again increased.

Improved efficiency and productivity on farm tends to be associated with younger farmers with older farmers less likely to invest in their farms. With almost of a third of Western Region famers over the retirement age there are significant implications for the development of agriculture in the region.

 

Helen McHenry

[1] CSO, 2010 Census of Agriculture 2010