Wide differences in farm household income revealed

Wide differences in farm household income in 2012-13 have been revealed by final estimates from Defra’s farm business survey.

The average farm pre-tax household income in England fell 17% to £52,500 in 2012-13, while average drawings remained steady at about £40,000.

However, this masked large differences between farm types, tenanted and owner-occupied farms, and the top and bottom earning farms.

Farm household income comprises the farm business income (FBI), including from diversified enterprises, off-farm income of the principle farmer and their spouse, and income from other household members. The “household” is that of the principle farmer.

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The wide income gap

About 40% of farm households had an income of £50,000 or more in 2012-13, and 12% had an income of more than £100,000.

However, a quarter of farm households had an income of less than £18,500.

Seventy-five percent of farm businesses had positive FBI each year for the last five years to 2012-13, but 10% of farm businesses had negative FBI in at least two of these years.

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Farm household income by farm type

While average farm household income fell across most farm types in 2012-13, specialist pig and poultry farms were the exception, where average FBI increased due to higher output.

A poor growing season and harvest impacted on both cropping and livestock sectors. Despite this, general cropping farms had highest overall household income in 2012-13 at an average of about £74,000.

Cereal farms came in second with an average income of about £68,000, although this had dropped from about £80,000 the year before.

LFA and lowland livestock enterprises continued to battle with the lowest farm household incomes at about £30,000 on average.

Dairy farms saw a big drop in household income from about £86,000 in 2011-12 to about £60,000 in 2012-13.

Tenanted v owner-occupied

Mixed tenanted farms had the highest average household income of all at £37,400.

This compared to £25,000 for tenanted farms and £32,700 for all farms.

Mixed owner occupied farms had the highest average net worth at £972,000, compared to an average of £161,000 for tenanted farms and £791,000 for all farms.

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Off-farm versus on-farm income

FBI accounted for on average 72% of farm household income in 2012-13.

However, for about one third of farming households, the income received from non-farming sources exceeded the income received from the farm business – the highest proportion since 2009-10.

Non-farm income made the highest contribution to household income on lowland grazing livestock farms, at 46%.

Off-farm income from the farmer, spouse or other household member remained relatively unchanged at £14,000-£15,000 on average per household.

Source of off-farm income

More than half of farmer households obtained at least 50% of their non-farm income from unearned sources such as pensions and social payments.

Another quarter obtained at least 50% from working in another sector or profession.

Only 2% obtain at least 50% of their non-farm income from working on another farm.