Great Britain

Scots farm income figures highlight reliance on subsidies

The latest farm income figures for Scotland show an industry still worryingly dependent on subsidies.

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The Scottish Government’ s Farm Business Income (FBI) figures are the most accurate barometer of profitability but because they come from analysis of actual farm accounts rather than an estimate this inevitably means a delay. The figures relate to the 2018 harvest year.

They show that without CAP support only 28 per cent of farms that year would have made a profit.

Put another way, the average business made a profit of £39,000 including £5,000 made from non-farming diversification.

But once this extra income and the average of £43,000 of support payments were removed this translated into a loss of £9000.

The 2018 farming year was not an easy one but financial weakness is not unique.

Comparisons show 30 per cent of farms have never recorded a profit before subsidy in any of the previous five years.

The FBI figures relate to specific farm types and show general cropping, cereal and dairy farms are generally the most profitable whereas livestock farms in the less favoured areas are the least profitable once support is deducted.

By another measure – the Total Income From Farming (TIFF) which amalgamates the whole industry into one – the gross income of £672m whittles down to £123m once support payments are deducted.

NFU Scotland’s director of policy Jonnie Hall said: “From the Beast from the East to the exceptionally dry summer, as well as significant market volatility, Scottish agriculture was put under severe pressure in 2018.

“The Total Income from Farming (TIFF) figures in this report bear that out and the Farm Business Income (FBI) figures make for even starker reading.

“Scottish agriculture’s profile is remarkably diverse, and some variation in performance is to be expected.

However, drilling into the FBI analysis, it is all too apparent that the variation runs deep within, as well as across, farm types and farm sizes.

“That is a flag of opportunity. It signals that there is scope to further build on productivity and efficiency improvements and, ultimately, bring about profitability that has less reliance on support payments.

“With a re-alignment of how Scottish agriculture is supported, by shifting from blunt area-based payments to support for actions around both productivity and environment, there is real scope to improve performance across the board.”

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