Farm incomes rise but still subsidy dependent

SCOTLAND - Farm incomes in Scotland saw a 16 per cent rise in 2006 to £577 million, an increase of £94.6m, primarily due to better prices in the cereals and horticultural sectors.
calendar icon 1 February 2007
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Scottish farmers saw an overall rise in incomes but some sectors did better than others, with the dairy sector still in rapid decline.

However, the income figure still shows considerable fragility weighed up against the fact that the country's 20,000 farmers and crofters received support payments of £556m, meaning that, without subsidies, much of Scottish agricultural would have been unsustainable.

That is supported by the net farm income (NFI) data which reveals that this fell by 27 per cent from last year's £13,800 to just £10,100. NFI is the technical measure representing the return to the farmer and his spouse, or partner, for their "manual and managerial labour on tenant type farming".

Scott Walker, policy director with NFU Scotland, said: "The NFI figure no longer represents an accurate barometer. The figures may be statistically accurate, they do not often tally with actual experiences.

"The total income figures are more reliable. The rise in value is good news, but it should not mask the continued concern over farm gate prices. This must be borne in mind both in next year's Common Agricultural Policy 'health check' and when decisions are made on the level of support to be siphoned off for environmental schemes."

The principal reason for the increase in the total income figure was a substantial rise in the ex-farm value of the potato crops, which shot up by £71.8m, or 66.3 per cent, on the previous year. Grain prices have also improved significantly, but they still remain below the levels of ten years ago.

However, the livestock sectors enjoyed varied fortunes with the total income declining by £10.8m, or 1 per cent. The value of finished cattle, animals ready for slaughter, rose by £13.4m, or 3.4 per cent. Returns for sheep and lambs also moved upwards by £4m, or 3.7 per cent.

The intensive pig and poultry sectors fared less well, with falls of 10 per cent and 15.6 per cent respectively. Scotland's dwindling band of dairy farmers - there are now little more than 1,200 who are still milking cows - suffered another fall in income of £6.3m, or 2.5 per cent.

That may not seem too bad, but it comes on top of several years of falling prices.

Source: Scotsman

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