Ireland's mild temperature, high rainfall, and fertile land offer ideal conditions for agriculture and, despite a pattern of decline over the past 2 decades, agricultural activity remains an important employer in rural and remote regions of the country.
The drop in agricultural output from 16 percent of GDP in 1975 to just 5 percent in 1998 reflects only a relative decline when measured against the steady increase in GDP driven by other sectors. While the fall in prices of agricultural products has been sharp, the volume of output has seen only a small decrease. The industry suffers from over-capacity and falling incomes and is increasingly reliant on EU subsidies and fixed prices. The number of small farmers remains high for an industrialized country, and many small farmers take up other employment to subsidize their income. While average farm size (29.5 hectares or 73 acres) is slowly increasing, the Irish Farmer's Association asserts that farm size remains the single biggest obstacle to generating adequate income in the agricultural sector. Adjusting to EU measures to bring prices more in line with world agricultural prices seems unlikely to help the industry, while reducing high levels of pollution in the waterways to comply with EU regulations is also not expected to aid farming profitability.
Average farming incomes fell by 6.2 percent in 1997, even though productivity per individual farmer increased significantly over the last decade. On 40 percent of all farms, the annual income was only I£5,000. On a further 25 percent of farms, it rose to between I£5,000 and I£10,000. Combined employment in agriculture, forestry, and fisheries fell from 175,000 at the beginning of the 1990s to 142,000 at the end of the decade. Figures that include related food-processing industries put employment at 176,000 in 1999, representing 12 percent of all workers in employment. Some figures estimate that agriculture generates so many service sector jobs that it indirectly accounts for 350,000 jobs (23 percent of the labor force).