Many farmers across England are spending more money then they earn, according to a DEFRA study.
Farmers took an average of £29,700 from their business in 2004/2005, while they made £28,200, the study of 60,800 farm household incomes found.
Richard King, business researcher at farm business consultant Andersons said the results, which showed private drawings exceeded farm income for seven out of the last ten years, were “not sustainable.”
“The figures don’t look good because more money is being taken from business than they can stand,” he said.
“Farms can perhaps get away with this for a couple of years to get over a slump but it’s been going on for a long time now.”
Mr King said many farmers had avoided going out of business by taking loans or utilising their assets by renting land and buildings.
However, he said overspending will eventually “be the death” of many businesses.
“They will run out of cottages to rent and money they can borrow to boost their income,” he said. “It’s just not sustainable.”
Many farmers had not compared how much they earn with how much they spend and needed to alter their expectations of their earning capacity, he added.
“Once they find out [their earnings and expenditure] it might give them a spur to sharpen their business performance and look at different ways of generating income.
“In some cases people will have to adjust their expectations of the lifestyle they can afford,” he said.
“The figures show there are a number of farms living beyond their means.”