Welsh farm incomes are under intense pressure with an official forecast predicting a hefty 41% fall.

Official forecasts for 2012/13 published this week show that net farm income across all farm types is forecast to drop by 41% year on year (2011-12 to 2012-13) to £17,600.

The situation for farms in Less Favoured Areas (LFAs) is more extreme, with net farm income for cattle and sheep holdings in those areas down 60%, to £10,000, for the same period.

Average farm business income on lowland grazing livestock and dairy farms is forecast to fall by 34% and 21%, respectively.

The Welsh government has attributed the decline in incomes to significant rises in input costs, falling lamb prices and a reduction in the value of the single farm payment.

NFU Cymru president Ed Bailey said the figures were no surprise to Welsh farmers.

“We have struggled during the past 12 months as a result of the exceptional weather, spiralling input costs, price volatility and the unfavourable exchange rate that resulted in an 8% drop in the single farm payment – all issues that were identified only last week in our own winter survey,” said Mr Bailey.

“The problems with production costs outstripping farmgate prices for dairy at times during the past year are well documented and the crash in lamb prices this autumn and winter has placed severe pressure on livestock businesses in Wales.”

Arable farmers had fared little better, he said, with yield and quality hit by the weather. Exceptional rainfall had affected autumn cultivations and planting and this would have knock-on effects on this year’s harvest.

“The past 12 months have shown the importance of the single farm payment to underpin farming businesses and food production in Wales,” added Mr Bailey.

“Given the exceptional circumstances that we now find ourselves in and with Welsh government figures predicting that hill and upland farms average net income is forecast to fall by up to a crippling 60%, these figures justify the need for dedicated LFA support from the Wales Rural Development Plan.”

Last month, Wales’ deputy farming minister Alun Davies reiterated that there would be no reinstatement of Tir Mynydd, a subsidy scheme designed to support hill farming. “I have no intention whatsoever of resurrecting Tir Mynydd and I expect that to be my last word on the subject,” he told farmers at a conference in Wales.

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