A small farm family needs €43,000 for living expenses

Some farmers are worried about the future, especially smaller farmers and particularly farmers in the drystock sector, because of the high cost of farm Investments, the rising cost of living and reduced returns from farming.

The outlook for the dairy and tillage sector is much improved.

It is estimated in 2008 that a farm family of husband and wife plus two children require approximately 43,000/year living expenses.

It could be less but it could also be a lot more.

Each Consumption Unit needs ¤11,000/annum for living expenses (everyone age 13 years or older is a consumption unit and everyone under age 13 is equivalent to 0.5 of a consumption unit).

This is a general guide given by Farm Management Specialists with Teagasc.

However, a farmer has other drawings and investments to make, for example taxation, pension/Insurance, Capital repayments and farm investments. These could be in the region of €25,000 and of course will vary from farm to farm. However, a farm may need to generate €65,000 – €70,000 in farm profit to cover €43,000 in living expenses and other drawings and investments as mentioned.

If the farm does not generate this level of income, borrowings could increase, farm may get run down, a site may be sold, quota or stock may be sold or some other way of generating more income may need to be considered be it from off farm work, alternative enterprise, small business etc.

There is no magic formula in relation to generating extra income or working towards generating extra income on farms in order to plan successfully for the future.

Every farm family is different.

Time should be given to thinking options through and preferred options should be well researched before any decisions are made.

Talking to professionals, agencies and any significant others will often help in the decision making process and help clear the air in relation to the physical human and financial factors involved.

It's also important to look at educational opportunities, training and employment supports that may increase the likelihood of getting a job, starting an alternative enterprise or small business etc.