5 December 1997

Farm incomes plummet

by 37% & worse to come

By Shelley Wright

TOTAL income from farming in the UK plunged this year by 37% in real terms, compared with 1996, according to the government.

But, when the cost of family labour is taken into account the figures are far worse, down 47% on last year, says the NFU.

The full-year picture, including the breakdown by sector, will not be released by MAFF until the end of January. But farming leaders insisted that the income estimates for 1997, taken to the end of October, were not a single-year blip. Everything pointed to returns slipping even more in 1998.

NFU senior economist, Sion Roberts, said incomes had fallen back to the levels seen in the late 1980s when agriculture was in deep recession.

Union president, Sir David Naish, said weather and production difficulties had played a small part in the income drop. But the overwhelming factor had been the strength of sterling, with the £ having risen by more than 30% against the German and French currencies since last summer.

Investment in farm businesses had all but stopped, with sales of new machinery now below the levels seen in the late 80s. And bank borrowings were up, Sir David said.

He renewed his appeal to farm minister Jack Cunningham to apply to the EU for agrimonetary compensation. "The British government could improve the position of many tens of thousands of farmers simply through paying the EU-funded half share of the aid," he said. That would amount to £480m, payable over three years.

Sir David added that the income estimates released by MAFF would not have taken account of the crash in beef and lamb prices seen in the past few weeks. So the final picture could be even worse.

"I can never remember a time when every sector has suffered as much as we see now. In the past there has always been at least one bright sector.

"And, even when things were bad, people could usually see signs that things might improve. But, at the moment, all people sense is fear."

Turning to the growing anger among farmers across the country, Sir David said the union would not support any illegal action. Instead, he urged producers and everyone living and working in the countryside to sign the unions new petition "Keep Britain Farming", which calls on government to demonstrate its support for rural communities. &#42