Total Income From Farming (TIFF) is expected to rise this year on the back of improved exchange rates, according to a leading economist.
Although 2013 was set to be a difficult year for farmers across the board, said HSBC’s head of economics Mark Berrisford-Smith at Cereals 2013.
The 14% drop in TIFF in 2012 wasn’t a result of poor weather, but brought about by the amount allocated in accounts for depreciation and adverse movement in exchange rates, he said.
The rate used to convert single farm payments from euro to sterling would likely be around the 0.85 mark at the end of September 2013, he added. In 2012 payments were converted from euro to sterling at a rate of 0.79805.
“This will be a marked improvement from where we were last year with a benefit for TIFF.”
Going forward, commodity markets were likely to edge down and become a bit more stable, give or take extreme weather events, added Mr Berrisford-Smith.
Overall the UK economy was slowly recovering but consumer earnings and house values needed to rise to inspire consumer confidence to spend, he said.
For more on this topic
DEFRA figures show farm incomes drop in 2012
See news and video from Cereals 2013