The Courier & Advertiser (Fife Edition)
Scottish farming income regains much lost ground
SCOTTISH FARM incomes appear to have been on something of a see-saw in recent years, with 2013 seeing a bounce back after the dismal results of the rain-sodden 2012 season.
Farmers may have thought this likely. and official confirmation came yesterday from Scotland’s Chief Statistician and the publication of Total Income from Farming (TIFF) estimates for the last three years.
The figures show income fell by 18% in 2012 compared to 2011, with initial estimates suggesting most of that drop was recovered last year.
Agriculture was worth £700 million to the Scottish economy in 2012, down from £840m in 2011, mainly due to the poor weather that year.
Income for last year may have bounced back to about £830m — which, once inflation is taken into account, is only 5% short of 2011 levels.
It may not seem like it to those at the sharp end of the farming industry, but the TIFF last year is likely to be the second highest in a decade.
The 2012 TIFF was the sixth highest or, more starkly, the fourth lowest over the same 10 years.
TheTIFF has for years been the standard measurement of farming profitability. It imagines Scotland as one big farm and is based on total income, including grants and subsidies, minus total costs. This gives a net agricultural income for the nation.
Closer examination shows an industry still too reliant on subsidies, particularly the Single Farm Payment. Of the £830m of income, £562m comes by way of subsidy — leaving an actual trading margin of only £268m on a turnover of just above £3 billion.
TIFF is affected by a number of factors but, as the Chief Statistician pointed out in his report, bad weather in 2012 followed by much drier conditions last year was a major factor.
The particularly good performers in 2013 include potatoes, which profited from very high prices at the start of the year and then a much better harvest. The figures are for a calendar year rather than a crop year, so will include the portion of the 2012 crop sold in 2013 and the freshly harvested 2013 crop sold at the tail end of the year.
Income from milk also saw an increase, with average prices rising from 27.9p per litre in 2012 to 31.3p per litre last year.
However, livestock — which accounts for well above a third of farm output in Scotland — did less well, seeing an estimated 4% fall in value.
Likewise cereals, which account for about 15% of output, also saw a decrease.
Total costs were estimated to have risen in line with inflation, but there was a large increase in the cost of feedstuffs for the second year running.
Feed now accounts for 24% of costs, compared to only 17% a decade ago.
However, labour costs do not appear to have risen last year, and there have been price reductions in red diesel and other fuel. Fertiliser costs also reduced by £34m last year.
NFU Scotland director of policy Jonnie Hall said: “The influence of the weather over 2012 and 2013 has had a huge effect on input costs and yields in particular for farmers in Scotland, and this has had a knock-on effect on incomes.
“Over the coming 12 months support payments remain hugely important to Scottish agriculture, and to key sectors in particular, to aid recovery and growth.
“In 2012, support payments to farmers amounted to around 79% of the TIFF figure, and in 2013 it was 69%.
“As support remains so important, it is vital that it continues under the new CAP arrangement to be targeted at active and productive farms in those sectors that carry higher input costs but which are responsible for fuelling Scotland’s food production and its value to the wider economy.”
Rural Affairs Secretary Richard Lochhead said: “The latest statistics reflect the challenging conditions our farmers have had to face in recent years, and it is good news that farm income levels are now going in the right direction.
“In fact, farm income in Scotland 2013 is estimated to be the second highest in a decade, which can only be welcome news for Scottish farmers.
“The figures show strong growth in some sectors, reflecting strong demand for our premium products and higher prices,” he added.
“I am aware, however, that other sectors are not performing quite as well and this may be partly due to the impact of the extreme weather we have experienced over the past couple of years.
“Scottish Government is currently seeking views on the support that will be available to farmers in future, and I urge everyone who has not already done so to respond to our consultations on direct payments and rural development.”