Irish farmers interested in renewables but could be moving faster

75% of Irish farmers remain deeply concerned about rising input costs

Ifac Irish Farm Report 2023 highlights;

§ Over half of Irish farmers could improve their resilience with greater financial planning (incl. budgeting and borrowing)

§ When considering renewables, over half of farmers say barriers are investment and low returns – signalling an appetite for adoption with targeted schemes

§ Over two-thirds of farm families could future-proof their businesses by starting the succession planning process

Irish farmers interested in renewables but could be moving faster

Against the backdrop of a reasonably profitable year for certain farming sectors, overwhelmingly the biggest concern for Irish farmers – for the second year in a row – is rising input costs such as feed, fertiliser, and energy. That is according to an annual Farm Report conducted by ifac, Ireland’s farming, food and agribusiness specialist professional services firm.

Ifac’s fifth annual Irish farm survey containing the views of 1,160 Irish farmers, and contained within the report, reveals the issues that are front of mind for Irish farmers today. The survey took place between October and December 2022.

The report confirms the impact of the cost-of-living crisis and input cost inflation on farm businesses -three quarters (75%) of Irish farmers say their biggest worry for 2023 is input prices (up 10% on last year). While over half (54%) are concerned about their electricity and gas costs at home, just over a third (34%) have not reviewed their energy provider in the past 12- months; a potential missed opportunity when small savings can still be achieved by switching.

The report also highlights that in this heightened and sustained period of financial pressure, more than half (53%) of this year’s survey respondents do not actively budget and, as interest rates continue to creep higher, over a third (37%) have not reviewed their borrowings for their farm business in the last 12-18 months.

As stewards of our land, Irish farmers are committed to ensuring that they farm sustainably; they have always been willing to take on projects that benefit the environment. As anticipated, climate action to meet Ireland’s climate targets is very much front of mind. More than half (52%) of farmers surveyed say the biggest barrier to adopting renewable projects is the level of financial investment required coupled with the low returns. Yet, to help tackle rising energy costs and for long-term sustainability, 41% say they would lease land to a solar or wind project if the opportunity arose, signalling an appetite for farmer-developed projects (wind energy or solar panels on farms) when targeted schemes come into effect.

Nitrate efficiency, to protect water quality and the environment, is another focus for Irish farmers – over a third (35%) have not checked if the nitrate banding rates will affect their farms. The recent derogation changes and the introduction of the Nitrates Action Plan are likely to have far-reaching income effects for a large cohort of Irish dairy farmers.

The survey also underlines that succession still requires focus – over two-thirds (69%) of Irish farming families have yet to identify a farming successor to start the succession planning process. This is two percentage points higher than last year. While succession can be an emotive hurdle for many farming families, over a quarter (27%) of farmers surveyed say the biggest barrier is the viability of the farm business, making it the No. 1 succession challenge in Ireland today.

Ifac’s Irish Farm Report 2023, titled ‘Championing a sustainable future’, features analysis and tips for each sector (including dairy, beef, sheep, tillage, poultry, pigs, and forestry), as well as informative case studies and helpful articles for Irish farmers on topics such as succession, renewables, Nitrates Banding, organic farming, interest rates, sustainable investments, employment, and the Fair Deal Scheme).

Other key takeaways include:

Overall

· 56% of farmers have a positive outlook for the year ahead – with 74% planning to still be farming in 5 years

· 40% would consider organics

Financial

· Fuel and transport costs were also a key concern for 51% of farmers

· 57% are worried about regulations and bureaucracy

· 48% say the cost is the biggest barrier to introducing more technology on their farms

· 22% complete budgets and/or forecasts on a monthly or quarterly basis

Succession

· 60% of farmers have a structured pension plan in place

· 90% of farmers have limited or no understanding of the Fair Deal Scheme

· 44% say carrying on the family name is not a factor in determining a future successor

Employment

· 44% of farmers with employees agree to wages in Net terms

· 32% of farmers struggle to find available employees – this is the main obstacle to attracting talent for the second year in a row. Other common issues are pay scales

· Only 33% of farm employers have contracts of employment in place

Minister for Agriculture, Food and the Marine, Charlie McConalogue T.D. said:

“I welcome ifac’s Irish Farm Report 2023. Our great sector is facing a period of challenge, as highlighted in ifac’s report, from rising inflation to environmental concerns. However, it is promising to also see that well over half of Irish farmers remain positive about the year ahead. Both I and the entire Government have been working to support Irish farm families’ livelihoods through these continuing uncertain times, helping them build more resilient businesses in the short and long term.

“Be that through the €90m in direct support farmers including the €1,000/farmer Silage Incentive Scheme as a result of the illegal war in Ukraine or the new €9.8bn CAP, we are focussed on supporting our fam families now and into the future.

“The report also highlights the issue of succession planning – something that can only be addressed sensitively by every farming family at the appropriate time with due consideration for greater gender equality. Enhancing the representation of women in Irish farming is something we are also addressing in Ireland’s new CAP and through the recent National Women’s Dialogue.

“I wish ifac every success with this insightful and practical report. The Government, my Department and ifac have a shared goal – for Irish farming to remain sustainable and to continue providing futures for many generations to come.”

John Donoghue, Chief Executive of ifac said:

“There is no denying that farmers have experienced serious cost increases in 2022 so, it is encouraging to see that more than half of our survey respondents are optimistic for the coming year, with three-quarters planning to still be farming in five years’ time.

“While the recent nitrates derogation changes are not without challenges, there are also opportunities. In areas like organics and, hopefully, renewables. Irish farmers have always been at the forefront of innovation and our report again outlines their commitment to positive environmental initiatives. Owing to fears about farm viability, succession planning is still being put on the back burner. However, in our experience, with the right financial advice and planning a viable option can be identified to help future-proof farm businesses.

“At ifac, we have been supporting and advising farming families for 48 years. We provide expert, tailored advice and a range of supports to help farmers manage their farm finances, enhance efficiencies, and build and strengthen overall profitability. Our teams will continue to support farm families for the next five years and, hopefully, well beyond through all the challenges and opportunities as they unfold.”

Ifac has been at the heart of agriculture and food since 1975, providing a quality service and expert advice to its farming, food, and agri-business clients across the country. A top ten accountancy firm, ifac has over 30 locations nationwide and 500 people serving 22,000 clients.

Link to the full report – https://www.ifac.ie/irish-farm-report.

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