Financial Analysis In The Irish Farming Industry Its Uses And Its Usefulness

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3.3.2 The Commercial Implications

The broad interpretation of the change is that having future subsidies being based on the average of 2000, 2001, and 2002 levels will favour some farmers and discriminate against others, as many must survive solely on the market price. Those strong enough to stay in the industry will be the farmers with the large capital backing or the state support.

In the long-term, the weaker farmers forced to leave will allow the remaining farmers increase their market share to retain their desired profit levels. This would involve a greater capital investment, in the hope that increasing total revenue, and keeping tight control on costs, would result in a sustainable income (see Appendix C for further discussion).
Matthews (2000) suggests that one will find a unique situation in agriculture in the future. The market price of the produce will have declined, however the quantity supplied by individual farmers will in fact have increased.

3.4 The Farm Management Implications of Commercialisation

This process involves a move in the agricultural sector onto a commercially based footing. Each farmer will leave the industry, supplement his income with another job, be better off or unaffected financially from the restructuring, or become an extensive commercial farmer. This discussion involves those farmers who are forced to react to the changes.

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