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Farm incomes in Scotland halved in four years

Staff writer |
New figures by the Scottish government show that the incomes of commercial farms in Scotland halved over the four years to 2014.

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Estimates from the Scottish Government’s annual Farm Accounts Survey show that average farm business income (FBI) fell by a quarter (£8,000) between 2013 and 2014, to £23,000; the lowest level of FBI since the measure was introduced.

The latest figures cover the period 2014-15 (the 2014 crop year) and are based on the results of audits from 500 commercial farms in Scotland. Income has been falling since a peak in 2010.

Since then, commercial farms have seen a decrease of 55 per cent (£28,000) from an average of £51,000. Farm Business Income has only been calculated since 2009, but the government’s previous metric shows average farm income in 2014 to be the lowest recorded since 2005.

Government statisticians said farm incomes often show large fluctuations from year to year, but the decline over the last four years is the most severe decrease in income since the BSE outbreaks in the mid 90s.

Due to movements in 2015 (including falls in milk, potato, cereals and lamb prices) officials said the drop-off in farm incomes is likely to have worsened since the period covered by this week’s stats release.

The 2014 crop year had the benefit of generally reasonable weather throughout. Cereal production increased compared to 2013 and lamb numbers also rose while longer term declines in other livestock halted. However, market prices for cereals, potatoes and milk were down.

These low prices combined with the less favourable euro exchange rate and lower value of subsidy payments caused profitability from agriculture to fall, according to Scotland’s chief statistician.

The main factor behind the recent fall in incomes was the reduced value of crops, which fell by £18,000 on average in the year to 2014.

The lower value of subsidy payments (down £7,000 on average) and long-term rises in input costs for livestock, as well as costs for machinery, land and buildings have also affected profitability.

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