DEFRA considering changing farm income calculations

DEFRA is considering proposals to change the way it calculates farm income with the intention of better reflecting the diverse nature of modern agricultural businesses.

In a consultation that runs until 8 January, DEFRA is seeking the industry’s views on the two primary measures used to calculate the income and profitability of agriculture in the UK.

Currently, the Total Income From Farming (TIFF) method is used to measure income at an aggregate level while the Net Farm Income (NFI) measure is a reflection of income at a business level, although it does not include income from all forms of diversification.

Reflecting modern farming

NFU chief economist Carmen Suarez welcomed the review, saying it was time that both measures were updated to reflect modern farm businesses.

“The agriculture sector has changed a great deal in recent years and there are activities that need to be included as well as those that should be dropped.”

Ms Suarez’s views were supported by Country Land and Business Association chief economist Allan Buckwell.

“The CLA view is that farming is an incredibly important part of land management,” said Prof Buckwell.

“Nearly all land managers have a diversified enterprise of some nature. The calculations should include detailed information on these activities to better inform our understanding of modern rural businesses. This will greatly improve government policy.”

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