Mary Coughlan (Donegal South West, Fianna Fail)

In February 2005 the Central Statistics Office reported a 3% increase in aggregate farm income for 2004. It calculated that the value of the cattle, sheep and pig sectors increased by approximately 8.3%, 6.1% and6.2%, respectively. From an income perspective, the livestock sector had a reasonably positive year, with the dairy sector experiencing steady milk output and prices.

These improvements reflect continuing positive trading conditions on EU markets for beef with consumption within the European Union exceeding production, good national and international demand for sheep meat and strong pig prices, while steady demand for dairy commodities helped maintain milk prices. The consumer price index, which measures the annual rate of inflation in Ireland, increased by 2.2% during 2004 so the increase in aggregate farm income was marginally higher than the rate of inflation.

This increase in incomes should be viewed in a positive light when account is taken of the fact that a substantial amount of the payments on 2004 premia entitlements will be paid this year in conjunction with the single payment scheme. In the past few years an 80% advance was paid on many premia schemes. In 2004 only a 60% balance could be paid. Therefore, the 2005 figure will include a 40% balancing payment due on livestock premia compared with 20% in the previous years.

To underpin the financial stability of the sector, my Department operates a range of measures, including market supports and direct payments aimed at supporting farm incomes. In 1990 direct payments accounted for 23% of aggregate farm income. Since the CAP reform of 1992, direct payments to farmers have risen and by the late 1990s they accounted for 50% of aggregate farm income. Direct payments paid by my Department to the farming sector in 2004 amounted to €1.64 billion or 74% of aggregate farm income.

I have vigorously pursued the goal of supporting farm incomes by maximising the level of direct payments to farmers, ensuring that the European Commission utilises all available management tools to support the markets, and by providing the best possible development framework for the sector. These very substantial direct payments reflect the real commitment of the Government to support farm incomes. These payments are in addition to other forms of market supports and grant aid for investment in farm structures.

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