The NFU has warned that the farming industry is becoming “dangerously unbalanced” in terms of farm incomes.
DEFRA statistics published on Thursday (31 Jan) point to an improvement in farm incomes of around 10%.
But the NFU has highlighted that the figures mask a huge variation in the performance of the different sectors, with rising cereal prices being the critical factor.
Higher grain prices are forecast to boost profits on cereal farms by 38% in the 2007/08 financial year. But it has decimated incomes on pig and poultry farms. The average pig farmer will make a loss of over £4000 this year, while poultry farmers have seen their profits slashed by more than 90%.
The grassland livestock sector has also had an extraordinarily difficult year, caused by a foot-and-mouth, bluetongue and badly phased New Zealand lamb imports.
This has resulted in forecast income falls of 34% for lowland livestock farmers, and of 44% for hill farms, to just £8700 and £5900 respectively per farm.
Horticulture had an up and down year, with higher prices for fruit and vegetables making up to some extent for a wet growing season. Milk price rises mean dairy incomes are forecast to rise by 44%.
Averaged across sectors, DEFRA says that total income from farming per head rose by 8.7% in 2007, in real terms to £13,349.
Total income from farming in the UK is also indicated to have risen to £2.54bn.
NFU president Peter Kendall said the figures demonstrated how important it was for the livestock sectors to recover, if the industry as a whole was to make its full contribution to securing Britain’s food supplies.
“Although an increase of ten per cent in net farm incomes looks like a worthwhile move forward, where we are now is neither healthy nor sustainable for the long-term.
“We desperately need to bring the industry back into balance, through a phased increase in producer prices for beef, lamb, poultry, eggs and pigs. The alternative will be the emergence of a boom, bust cycle, which could de-stabilise the arable sector as well as ultimately fuelling food price inflation by leaving us dangerously dependent on increasingly expensive imports.”
Junior DEFRA minister Jeff Rooker said he was encouraged by the figures.
But he added: “Although the overall picture from these statistics is positive, I am aware that the rise has not been universal across all parts of the industry.
“Many livestock farmers have had a very difficult time in recent months due to a series of unforeseen events including animal disease outbreaks and increasing feed prices.
“For our part, government remains committed to working with the agriculture sector to help farmers drive up their economic and environmental performance.”
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