Living off the land? Not exactly!

November 2012

THE FARMING LIFE: In the second of our series, beef and sheep farmers tell KATHY SHERIDAN that there is money in the food business, but it’s the factories and processors that are making it — and the only way for families to survive in farming is to work off the farm

‘Oh yes, it’s true. My husband is a kept man,” laughs Teresa Turley, arriving home from work to find her husband Tom and The Irish Times drinking tea at the kitchen table of their comfortable, 400-year-old farmhouse in Clonfert, east Galway. It’s not entirely a joke.

Behind the excitable headlines about farm-income hikes, the reality is that three-quarters of all farmers still earned well below €20,000 from the farm business in 2010, according to a Teagasc study. That’s half the national average industrial wage and just over a third of the average public sector salary, in Tom Turley’s words.

In fact, just a quarter of Irish farms — some 26,000 — were deemed economically viable businesses in 2010. It’s hardly surprising then that more than half of all farms have an off-farm income. And that often emanates from the wife, that highly desirable creature once known in farming parlance as “the layin’ hen” — ideally a nurse or teacher. Or indeed, Teresa, who runs a vegetable shop in Nenagh.

“You couldn’t do this without an off-farm income,” says Michael Biggins, who was lucky enough to bag a teacher. He runs a 60- to 70-strong herd of suckler cows on 120 acres of exquisitely maintained Mayo land beside the Corrib river, part of which has been in the Biggins family since 1765.

Jewel-like fields, bounded by miles of ancient stone walls; a majestic beech tree reigning centre stage; cattle grazing contentedly and sheep moving lazily in neighbouring fields under a blue, balmy sky. It’s the kind of landscape that, for tourists, transforms the Irish fantasy into vibrant reality. Biggins eyes the beech tree as a parent eyes a much-loved, errant child. It’s the sort of “obstacle” that would be bulldozed in a more ruthless business. He loves it anyway.

In a way, it’s a metaphor for this style of farming. Tied to nature, irreplaceable, heartbreakingly lovely on a balmy, September day. But the beauty is skin-deep and high-maintenance. This is stony ground, reclaimed and drained and needing constant attention. “You couldn’t stick a plough into it,” he says.

Without Biggins’ care, it would rapidly descend, not into the charming, wildflower meadows of fond imaginings, but into an ugly, impenetrable tangle of briars, bushes and noxious weeds. His land is in four divisions, typifying the problem of farm fragmentation, probably the most pressing issue of an industry in desperate need of restructuring and efficiencies.

IRISH FARMS ARE TYPICALLY broken into separate land parcels, often three or four. In east Galway, Tom Turley farms eight separate parcels and is acutely aware of the need for consolidation. Capital gains tax is the problem.

Biggins’ land supports his suckler cows (each produces one calf a year, sold as a “weanling” at about eight to 12 months), a system that improves national beef quality. Even for an efficient producer, however, it doesn’t add up. Though Biggins got an increase of €160 per head for the 55 weanlings sold this year (an €8,500 increase in total), he is still worse off than he was two years ago. This is due to rocketing input costs and the abrupt withdrawal of the annual €7,500 Reps payment (for general environmental maintenance) in 2009. That’s left him with deductions of around €12,500.

“I barely retained the single farm payment (SFP) — less than €20,000 in my case,” he says, meaning he broke even and can put it into restocking and improvements. The SFP is the famous cheque in the post — a rule of thumb is that it averages about €100 an acre — and although it’s all he has left after a hard year’s slog, Biggins recognises the absurdity of the system. “If I never produced anything at all, I could have held on to that . . . I could empty the farm and still get it.”

A stark graphic in Teagasc’s National Farm Survey 2010 shows that in the cattle and beef sectors, market income failed to cover production costs.

It’s not about farmer efficiency apparently. William Kingston, a strong, confident, young dairy farmer in west Cork, tried farming for beef. “I have a lot of sympathy for the beef guys who are depending on the subsidies. They haven’t a hope. It’s just not possible to make money out of it. Really, it’s nothing more than a savings scheme. The meat factories are making the money.”

It is pointed out more than once that just three or four processors dominate the market.

Dr Cathal O’Donoghue, a calm scientist (via LSE and Cambridge) and head of research at the Teagasc Rural Economy and Development programme, notes that the agri-food industry “generates very substantial net earnings for Ireland Inc. It exports 80-90 per cent of its beef, dairy and sheep, the vast majority of it is processed beef. So there is money being made — and farmers aren’t making it.”

Consumers have also done extremely well out of low farm-gate prices and the much derided subsidies, says Turley. “In the 1970s, consumers were spending 30 per cent of disposable income on food — now it’s 11 per cent, even though I don’t know of any multiples who work off less than a 40 per cent margin.”

Ask a strong Co Wicklow grain farmer like Tom Shortt about the SFP and he is utterly unapologetic. “It’s not keeping me in a lifestyle, it’s to keep me producing food at a price that Joe Public can afford. If you could halve the supermarket take, you could halve the single farm payment. Supermarkets are getting too big a share.”

Turley, who runs a 225-acre suckler and sheep farm, says he took in less than €16,000 last year after allowing for farm mortgage and interest payments. The mainstay of the household income is the greengrocers shop run by his wife Teresa, a product of his earlier life as a vegetable grower and hers working in retail. “If we hadn’t the shop, I’d have had to go working, possibly into the building,” says Turley.

“Farmers really are living on €14,000 to €15,000 a year,” says Biggins, as his wife Bridie, the primary teacher, is off washing school desks a few days before term.

Between them, they’ve produced a family of five highly educated achievers. “This is the first September in 15 years that we haven’t been going to Dublin or Limerick looking for a house for student offspring. I feel very strongly about farmers being accused of hogging all the third-level grants. We got not one red cent towards third level. It’s sacrifices; we scrimped and saved. We went on the odd holiday; caravanning holidays. The reason is that we value education highly, even though most of us would be lucky to have second level.”

In the end, it’s not just the low-income threshold that most non-farmers would find hard to sustain. It’s the head-swivelling volatility of it.

In the year from 2009 to 2010, average part-time incomes (as defined by Teagasc) zoomed from €12,000 to €18,000, while full-time farmers went from €24,000 to €43,000 — and that still only brings them back to a little above 2006 levels.

Near Newtownmountkennedy, Co Wicklow, grain farmer Tom Shortt is running nearly 1,000 acres between owning and leasing. If the farm gets any bigger, he says, he may turn it into a company to manage the “tax surges” created by market volatility that, in a few years, has seen grain sink to €85 a ton then soar to €195 a ton. This year, he’s getting €195 and happily netting €40 of that.

But in 2007, 2008 and 2009, he says, “we were on our knees, getting €115 for grain that was costing us €160 to produce. If we didn’t have the SFP, we’d have been out the door seven years ago.” Meanwhile, they used the SFP to scale up: three tractors at €100,000 each, a combine harvester at €200,000, grain stores costing about €150,000.

An outsider looking at his beautiful old home up a long, surfaced avenue, would assume that here is a farmer doing very, very well. “It’s all relative. We have the scale but also have the costs associated with that. Farmers should know when they have it good and should stop whingeing. The thing is that as soon as we have it good, there are so many in the industry to keep us down. Everybody is looking over the hedge now at farming.”

Of course he was tempted by cheque-waving developers in the boom, amid talk of five-star nursing homes and golf clubs. “I know what we were doing made us look laughable by comparison. But you only sell it once.”

In truth, he is “very, very concerned” about the massive optimism around agriculture. “It’s over the top. A lot of people are already in terrible trouble with the milk super-levy. The industry is going from 0-60. Look what happened to construction.”

Sons of the soil come home to roost

THE SONS of the soil are coming home. The evidence is there in rocketing agricultural college enrolments, although it’s fair to say that not all of the students are full of enthusiasm. Even for 20-year-old David Douglas, who likes farming, it wasn’t quite in his life plan.

“I think a lot nearly have to go to ag college because they haven’t a choice, but they haven’t much interest either. I certainly wasn’t fully committed to farming,” he says, in his parents’ home at Monalin Farm, near Newtownmountkennedy, Co Wicklow.

“After school, I wanted to do an apprenticeship in mechanics or fitter/welder and combine that with part-time farming. Then the apprenticeships disappeared.” So he went to ag college.

His mother, Caitríona — who runs the family’s free-range egg business with 2,200 hens on their hilly, 85-acre sheep farm — understands why David is undecided. Egg sales have increased but prices are the same, inputs have risen and profits were “way down” by about €200 a week, or 15 per cent. “But it would be impossible to manage without them,” she says.

“Some would look at this farm and say there’s not enough land for three adult units,” says David. He can pick up a few weeks’ work in the local factory or work a few days a week for a dairy farmer, but he aspires to a “full week’s wages” — around €400 to €500, he says.

“I’d like to come home full-time,” he says reflectively, to his mother’s surprise. “I’d like a kind of partnership”.

Caitríona nods agreement and starts the bidding : “I’d be thinking €300 to €400 a week, as we’re building up an enterprise,” she says mildly.

“We’d have to get more hens, another 1,000 maybe,” he says.

He and his father, Syl, have already been expanding sheep numbers. “We need 300 between us and in a few years time, I’ll probably own half of them.”

He has been an assiduous saver since he was a schoolboy, putting away half his €350 take-home pay from a factory job.

“I don’t know how people make money in beef. Or sheep,” he says frankly.

“Everyone thinks farmers are rich. But we sold lamb at €4.60 a kilo, which the supermarket is charging €10 to € 12 a kilo for. If you could get €5 a kilo, that’d be the right price. You’d make a living”.

And thus, do great partnerships begin.