asked the Minister of Agriculture, Fisheries and Food what factors account for the higher return on dairy farming in Northern Ireland, as shown in table 27 of the annual review White Paper, Cmnd. 9423.
Net farm income, the measure used in table 27 of the annual review White Paper (Cmnd. 9423), comprises total farm output less total costs. It is a measure of the return to the manual and managerial input of the farmer and spouse and to tenant type capital invested in the business. Because net farm income is the residual between relatively large aggregates of output and costs, small changes to either of these components can have a significant effect on the calculated level of income. Seasonal factors in a particular year can exert a considerable influence on both outputs and inputs and hence on the level of net farm income achieved. In 1983–84 weather conditions had a significant impact, depressing milk yields in Great Britain and adding to the cost of inputs through higher usage of concentrate feed, thereby contributing to a substantial reduction in income on dairy farms. Northern Ireland, on the other hand, enjoyed relatively better weather, milk yields were maintained at record levels and an excellent year for the production of grass and winter fodder enabled savings to be achieved in the usage of concentrates. Hired and family labour inputs tend to be lower in the case of medium-sized farms in Northern Ireland where the farmer's own labour (which is not treated as a cost in calculating net farm income) accounts for a high proportion of total farm labour input. This also helps explain the higher farm income figure in Northern Ireland.