Farm incomes up – but only from a very low base

While official figures released yesterday showed that average farm incomes for 2016-17 had risen 94 per cent on the year, almost half of all farmers still earned below the national minimum wage.

Providing some context after the Scottish Government had released the latest round of figures on farm business income on Scottish farms, NFU Scotland chief executive Scott Walker added that without farm support measures many more farms would be in a loss making situation.

“Until we can address the inequalities in the supply chain, government support for the industry remains essential and must not be threatened due to Brexit,” said Walker.

“The country has the ambition to double the size of the food and drinks sector in Scotland by 2030 but if all are to benefit from this we will need to radically rethink the supply chain so that the hard work of farmers and their families is valued, and that a fair sustainable price is paid for what they produce.” But despite what appeared to be a near doubling of income levels on the previous year, the figure stood against a backdrop of a sustained and sharp decline in recent years. The statistics confirmed that this was the first rise in incomes since 2011 – since when they had fallen by 46 per cent – and had simply returned incomes to the 2014 level.

The latest figures were published by Scotland’s chief statistician and were based on annual audits of nearly 500 commercial farms and looked at the financial health of farm businesses using actual farm accounts for the 2016 cropping year.

The report showed that the improvements came from lower input costs during the year boosted by bettercommodityandsupport prices – both of which had been boosted primarily by a fall in the value of sterling due to the Brexit vote.

However, despite the upturn in traditional farming enterprises, the figures showed that farmers who had expanded outside traditional agricultural work, such as renting out holidays homes or building small wind farms to generate electricity, had done better than those that hadn’t.

While all farm types showed improved incomes, high prices for potatoes and milk during that year had seen general cropping farms and dairy units head the league table of farm incomes.

The report also showed that the average net worth of Scottish farm businesses stood at £1.3 million and confirmed that farm businesses were capital intensive and typically had high asset values which were not included in income measures. Average debt levels were also fairly low with liabilities equal to 10 per cent of asset values.