Scottish farming income falls 15% in 2012

Scottish agriculture saw its total income from farming fall by £111m to £635m between 2011 and 2012. This was a 15% fall before inflation, but a 19% drop in real terms.

Average farm business income (FBI) fell by £1,000 to £45,000, with dairy farms generating the largest incomes at £80,000. Cattle, sheep, dairy and mixed farms achieved their highest incomes in 20 years.

However, about one-quarter of the Scottish farm businesses surveyed did not earn enough to cover the value of unpaid labour at the minimum agricultural wage rate.

FBI represents the return on the unpaid labour of farmers, their spouses, non-principal partners and family and on the capital invested in the business, including land and buildings. It includes income from diversified enterprises.

Further figures published in the Scottish government’s Economic Report on Scottish Agriculture show liabilities rose by 24% between 2003 and 2012 to £2.4bn, representing 6% of total asset value.

Agriculture employed 68,400 people in 2012, a rise of 630 from 2011, with Scotland accounting for 18% of all UK cattle and 21% of the UK sheep flock.

Average rents rose by 15% between 2008 and 2011 after several years of no change. The average rent on Scottish let land in 2012 was about £32/ha, with less favoured area farms at £20/ha and non-LFA farms at about £119/ha.

The proportion of Scottish farmland in tenancy arrangements has been falling steadily for 30 years. In 2012, a total of 1.39m hectares was rented under tenancies of at least one year (including crofts), representing about 24% of agricultural land.

Of the 6,700 tenancies (excluding crofts) in Scotland, about 80% are 91 Act secure tenancies, with about 5% of tenants having had a rent increase in 2012.

Scotland has six types of tenancy arrangement: rented crofts, Small Landholders Act Tenancies (only found outside crofting counties), 91 Act Tenancies, 91 Act Limited Partnership Tenancies, Short Limited Duration Tenancies and Limited Duration Tenancies.

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