According to Teagasc, direct payments accounted for 143 per cent of farm incomes. This means that the average farm in Ireland is run at an operating loss. Yet there is a huge opportunity there. Unfortunately, agriculture is dominated by subsidies, and these are not a long-term answer to agriculture as a business.
Ireland receives about €1.7 billion per year in agricultural subsidies from the EU (or €13,000 per farm).
Payments like these distort the market, but abandoning them would mean that agriculture would collapse in Ireland.
David McWilliams believes that the agriculture industry needs to be shaken up. So, instead of telling average farmers that they will get a subsidy – ie a subsistence payment – farmers could get an ‘investment payment’.
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