East Anglian profits fall
East Anglian profits fall
CEREAL profits on East Anglian farms are expected to drop more sharply this year than last, with more than half of farmers unable to make a living wage, according to Norfolk accountants Larking Gowen.
The firms survey, of 82 farms covering 14,570ha (36,000 acres), shows East Anglian farm income fell by 45% in 1997/98 compared with the previous year. A high interest rate which prompted a strong pound was a key factor in reducing income by at least £100/ha (£40/acre).
"There is no sign of things getting any better," says partner Jonathan Ellis. "Farmers are facing the worst crisis in living memory. We expect a further reduction of up to £50 an acre this year."
At least half of farms will make no profit, even before personal salaries are taken into account. Spending will continue to fall rapidly, he predicts. "Investment per acre dropped from £121/acre to £68/acre last year. It will probably drop a further £10-15/acre this year. The ripple effect is going to be severe, especially in areas where there is little alternative employment."
Bank borrowings could rise £75-£100/ha (£30-40/acre), he adds. *