Farm produce prices in Ireland saw a rise compared to last year, especially prices for milk, cattle and sheep, according to figures on Monday.
According to Teagasc, a semi-state farm research and advisory body, grain growers also had a good harvest in 2011.
At the launch of Teagasc's 2010 annual report, Chairman Noel Cawley said that average farm incomes rose last year by 46 percent primarily due to higher milk prices. This rise in milk prices lead to an average income increase on dairy farms of 81 percent in 2010.
Overall figures for exports of Irish food and drink show an increase last year of 11 percent to 7 billion euros.
However, the report said sales of farm produce is almost totally eliminated when the cost of seed, fertilizer, bank interest, electricity and diesel and other costs are accounted for.
Cawley said subsidies accounted for 98 percent of farm incomes and said this highlighted the dependence of farm incomes on the European Union's Common Agricultural Policy (CAP).
The CAP provides a direct subsidy payment for crops and land which can be cultivated. It also puts in place price support mechanisms including guaranteed minimum prices, import tariffs and quotas on certain goods from outside the European Union.
Reforms of the system are currently underway, reducing import controls and transferring subsidy to land stewardship rather than specific crop production.
Cawley said it was important for Ireland's future to achieve a favorable outcome from the reforms of the CAP which will come into effect in 2013.
Teagasc, which offers courses in farming, has seen an increase in demand for educational courses with 3,500 students currently participating.