Scottish farm incomes plummet by a third
31 March 2014 | By Alistair Driver
MORE than 40 per cent of Scottish farm businesses did not generate enough income to meet the minimum agricultural wage, as average farm incomes fell by more than one-third in the last financial year.
One in five farms made a loss in 2012/13, compared with one in 10 the previous, figures released today by Scotland’s Chief Statistician show.
Overall, average incomes on Scottish farms fell by 34 per cent to £30,000 in 2012/13, compared with 2011/12, the figures reveal.
Scottish farm incomes fell in 2012/13
One of the most stark statistics unveiled in the annual figures in is that when support from grants and subsidies are removed, the average farm made a loss of £16,000.
Incomes fell across all farming sectors with the exception of general cropping businesses which saw a 10 per cent rise in profits from £52,000 in 2011 to £55,000 in 2012/13.
Lowland cattle and sheep farms and cattle and sheep farms in less favoured areas saw incomes more than halved in in 2012 to £18,000 and £20,000.
The large drop in the 2012/13 financial year is attributed to a combination of poor growing and harvesting conditions, falls in livestock and crop production, rising input costs and falling levels of grants and subsidies.
The fall in output value was due to an average £4,000 drop in both the value of crop production other than cereals and potatoes, and in the value of sheep.
The increased costs were driven by a hike in the value of feed used on Scottish farms, which rose by an average of £6,000, or 19 per cent, to £37,000.
The average value of single farm payments fell by around £2,000 to £38,000 in 2012/13 due to unfavourable exchange rates.
When the income estimates are converted to hourly income for unpaid labour, such as farm owners, family members and business partners, 43 per cent of businesses would not have generated enough income to meet the minimum agricultural wage.
This includes the one in five farm businesses that made a loss, up from one in ten in 2011.
The figures confirm that some farm businesses rely on other sources of income than from farming alone, including contracting work; hosting mobile phone masts, provision for tourism and recreation; and financial support from grants and subsidies.
Despite the reduction in incomes the estimated average net worth, assets minus liabilities, of Scottish farm businesses remain largely unchanged at £1.3 million in 2012; down one per cent due to a rise in liabilities.
The report is based on the findings from the Farm Accounts Survey which is used to inform, monitor and evaluate European, UK and Scottish agricultural policy. The survey does not include information on pig, poultry and horticulture sectors.
Farm Business Income (FBI) is the headline business-level measure of farm income, or profit, in the UK. FBI represents the total income available to all unpaid labour and their capital invested in the business. Returns from diversified activities are included in overall FBI. FBI figures are derived from the results of the Farm Accounts Survey.
The full statistical publication is available here
An Infographic summary can be viewed here
Interactive and customisable charts are available here
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