Napoleon is praised by the neighboring Farmers for increasing production while providing less food for his laborers. Why is this praise ironic?

The irony of this praise is that the whole point of the rebelion was to improve the conditions for the residents of what was once Manor Farm under the rule of Mr. Jones. In fact, the animals' lives have not improved; if anything, they have gotten worse. And the praise comes from the fact that adjoining farms seem to care only about the business "bottom line." Their prase is actually encouraging a tyrrant to make more money rather than acting in more humane ways.