Around two-thirds of Irish farms are not economically viable, according to the agriculture and food development authority Teagasc.
The authority's 2012 report finds the average family farm income fell by 15% to €25,483.
The figures also reveal how the wet weather in the summer of 2012 had an impact on production costs and crop yields for farmers.
The organisation said the inclement weather was particularly challenging for livestock farmers.
Almost a third of those surveyed reported being short of silage.
Many farmers said they had also depleted their stock of winter fodder by early autumn.
Teagasc said direct costs for dairy farms increased by 21%.
The authority said farmers continue to be highly reliant on direct support payments.
The average payment per farm stands at just over €20,000 and makes up 81% of farm income.