19 April 2007

4 minute read

Europe

The key finding is that average unpaid family labour on NI beef and sheep enterprises is valued at £27,000 per year or £11 per hour. If this finding is applied to the 19,859 cattle and sheep farms active in NI at present (DARD Statistical Review on NI Agriculture 2006), this would equate to an annual unpaid labour bill of £537 million for NI beef and sheep production.

The methodology used by Promar was to relate the skills which farmers have to the skills in other comparable industries, and to use the salary levels in these other industries as a means of calculating the market value of farmer and family labour, in other words the value at which the farmer could sell his labour in other industries.

The procedure involved calculations on a standardised 37-hour working week (the Northern Ireland average) to calculate the hourly rates for manual work and management, and then applying them to the actual hours worked by farmers and their families.

There were also some other significant findings, in particular the large number of hours worked and the little holiday taken by farmers and their families.

On those Northern Ireland farms that are predominantly beef and sheep farms, farmers and their spouses and families in total work on average 74 hours per week on the whole farm, of which 48 hours are on the beef and sheep enterprises, and take half a day holiday per year. The 74 hours per week worked on the whole farm by all family members equates to an unpaid farmer, spouse and family (FSF) labour value of £41,691 per year; the 48 hours per week on the beef and sheep enterprises equates to £27,042 per year or £10.82 per hour unpaid FSF labour on those enterprises.

Looking at a predominantly beef & sheep farm as a whole, 35% of the total farm time is spent on enterprises other than beef and sheep, and only 65% of the total FSF farm work is spent on the main enterprises. Of the 48 actual hours worked on beef and sheep enterprises the farmer averages 39.5 hours per week, the farmer's spouse 3.2 hours per week, the farmer's sons and daughters 4.8 hours per week, and other relatives of the farmer 0.6 hours per week.

Approximately two-thirds (63%) of the total farm FSF hours are on manual work, and one-third (37%) on management tasks. The values calculated for these different skills was £8.20 per hour for manual work and £15.32 per hour for management, which when weighted for the time spent on these tasks gives the overall average of £10.82 per hour.

On the basis of these hourly rates for different skills, the proportion of the total 48 hours beef and sheep work per week that was for manual work was valued at £12,894 per year (30.2 hours per week x £8.20 per hour x 52 weeks per year), and the time spent on management was valued at £14,148 per year (17.8 hours per week x £15.32 per hour x 52 weeks). For the whole farm the proportion of the total 74 hours work per week that was for manual work was valued at £19,879 per year (46.6 hours per week x £8.20 per hour x 52 weeks per year), and the time spent on management was valued at £21,812 per year (27.4 hours per week x £15.32 per hour x 52 weeks).

The whole farm manual labour value of £19,879 is lower than the £23,349 FSF labour cost on Northern Ireland cattle and sheep farms derived in the Farm Business Survey (FBS) and estimated from the data given by DARD (weighted average of LFA and non-LFA) in its booklet “Northern Ireland Farm Performance Indicators 2005/06”, in which unpaid FSF was calculated 'at the appropriate rate for comparable paid labour'. The sample size in FBS was 335 farms, in the LMC Labour Survey the sample was nearly four times larger at 1,213 farms.

It is clear that the farmer, spouse and family labour cost for managing the farm business is a major component of labour cost that has previously not been quantified, and which should not be ignored in the overall cost structure of producing beef and sheepmeat.

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