NFUS "DISAPPOINTMENT" AT DECLINE IN SCOTTISH FARM INCOMES

NFU Scotland believes the publication of Scotland’s farm income figures for 2009 has highlighted another turbulent year for Scottish agriculture, one that has seen a disappointing decline in the total value of Scottish agricultural income for the second consecutive year.

The statistics published today (Thursday, 28 January) by Scotland’s Chief Statistician, show that Total Income From Farming (TIFF) decreased by £20 million to £589 million between 2008 and 2009. This represents a fall of 3.2 per cent before inflation is accounted for and a fall of 2.6 per cent in real terms. It comes on the back of an eight percent decline in TIFF between 2007 and 2008. Combined, the figures show that the fall in total income to Scotland’s farmers is more than £75 million in the past two years.

Scottish agriculture remains subject to varying degrees of volatility. The higher farmgate prices some farmers received last year for their beef, sheep and pigs were overshadowed by a steep decline in returns from cereals and milk while the costs of key inputs such as fuel, fertiliser and animal feed remain historically high. As a result, the average income on Scottish farms for 2008/09 fell by £2200 to £38,700 compared to the previous year.

NFU Scotland’s Policy Director Scott Walker said:
“It is clear that 2009 was a very difficult year for many of our farmers. On the positive side, demand for beef, lamb and pork was encouraging but the crash in cereals and milk prices has meant that the overall income to Scottish farming has fallen for the second year in a row.

“To put things in context, this fall in income is set against the favourable exchange rates seen throughout the whole of 2009 which will have undoubtedly assisted farmgate prices in all sectors. The lift in the value of the Single Farm Payment (SFP), brought about by the improved exchange rate, has been a significant factor in underpinning the risks in the marketplace.

“The income figures highlight the ongoing importance of public support to the industry. Without the benefit of SFP and monies delivered through the Less Favoured Areas Support Scheme, the majority of Scottish farm businesses would have at best broken even or operated at a loss.

“The future delivery of support to the Scottish industry is currently open to debate around the country as farmers discuss the initial findings of an independent inquiry into the delivery of agricultural support in Scotland, produced by leading industry expert Brian Pack and his inquiry team. The initial report makes a strong case for the ongoing support of farming and food production and that without such assistance, ongoing market failure and volatility would leave the country's food and drinks supply vulnerable and undermine the environmental and social benefits delivered by the industry.

“With incomes falling and the importance of support brought more sharply into focus, I would urge farmers to participate in their nearest Pack Inquiry meeting.”