Farming incomes plummet by third

Scottish farm incomes fell by more than a third last year and the average farm business would have made a loss of £17,100 without support payments, according to government figures.

The Scottish Government’s farm business income estimates for 2019-20 suggest average business income was down 36% in the year to £25,800 – the second lowest value in the last eight years.

The figures, which exclude pig, poultry and horticulture businesses as they do not receive support payments, show the average farm made a loss of £25,500 from agricultural activity – more than twice the loss made in the previous years.

Increased costs and a decrease in the value of outputs were blamed for the drop in income, although income from contract farming and diversified activities were up 3% and 4% respectively.

“Losses to the business were offset mainly by support payments; direct payments to farmers continued to have the largest impact on overall farm income,” said a Scottish Government statistical release.

The figures showed around 71% of farms made a profit in 2019-20, when support payments were included, and 28% made a profit without support.

Beef and sheep enterprises in Less Favoured Areas (LFAs) were most reliant on support payments with only 6% reporting a farm income greater than zero without support payments, while 68% of general cropping and 67% of dairy farms brought income without support payments.

General cropping farms had the highest average income by farm type at £69,100, followed by dairy at £51,000. The average income from mixed farms was down 77% to £8,100, while cereal farms income was down 33% to £41,000.

Combined cattle and sheep LFA farms received the highest average support payments of £56,900, and without this these farms were making an average loss of £33,500. The average LFA sheep farm made a loss of £37,600 without support payments and only 11% turned a profit without subsidies.

The figures also revealed just over half of farm businesses – 52% – could not afford to pay at least the minimum agricultural wage of £8.12 per hour, and 29% were unable to provide any earnings to unpaid labour from farm income.

More than half of farms – 55% – had diversified activity and the figures suggested those without diversified income streams generated £21,300 less income per annum than their diversified peers.

SLOW PROGRESS: Sheep farmers were heavily reliant on support payments as agricultural income fell steeply.

Higher cost and lower value took toll of farm businesses.