Farm incomes see 6% fall according to DEFRA

Farm incomes in the UK fell by 6% in 2009 to £4.07bn, according to latest estimates from DEFRA, as declines in output values outweighed any savings made from cheaper inputs and the increase in single farm payments.

According to a DEFRA statement, Total Income From Farming per full time person employed in agriculture was also down by 8.2%, putting the average earning at just under £21,000.

“In 2009, the total value of output at market prices fell by 3.1% to £19.3bn,” it said. But this masked significant variation between sectors, with the value of cereals and milk down by 25% and 10% respectively, while cattle, pigs and sheep were up 6%, 17% and 21% respectively.

Input costs were also down, by 2.2% says DEFRA, with fuel and animal feed in particular costing farmers less.

In contrast, the value of the single farm payment received a welcome boost in 2009, as the weakness of sterling raised the amount when converted from euros to pounds. Direct payments are estimated to have raised output by another £3.6bn, or 14%.

But the figures are in stark contrast to the first estimates issued by DEFRA last November, which suggested that farm incomes had actually increased in 2009, to the tune of 25%.

At the time these figures were questioned by industry consultants and analysts, who had been expecting a downturn, based on what they were seeing on their clients’ farms.

The main difference between now and then, however, is that DEFRA has significantly raised the final TIFF figure for 2008 – from £3.45bn to £4.36bn – which has turned what seemed like an income gain in 2009 into an income loss.

“The revised figure is certainly closer to what we expected based on what we were seeing at farm level,” said Richard King of farm business consultants Andersons. “And even though the new figure is lower, Total Income From Farming is still over £4bn, which is the second best result in over a decade.”

Farm Business Survey 

As well as the TIFF figures, the DEFRA release also includes provisional figures for the Farm Business Survey, showing income by farm type on English farms in the year ending Feb 2010.

This puts average farm business income at £52,000 on cereal farms (-25%), at £61,500 on dairy farms (-11%), at £25,000 on lowland livestock farms (+35%) and at £24,500 on upland livestock farms (+43%). The biggest increases are in the intensive livestock sector, however, with specialist pig units making £146,000 (+147%) and poultry units at £89,000 (+87%).


• For further comment and analysis, see Phil Clarke’s Business Blog

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