Failures wont cause Scottish restructuring

28 January 2000

Failures wont cause Scottish restructuring

RESTRUCTURING of Scottish farming is more likely to be a result of retirements and amalgamations than widespread business failures, according to a new survey.

Although 63% of 445 farmers across Scotland who responded, representing all farm types, said they planned to be farming in five years time, 21% said they intended to retire in that period.

Another quarter indicated they wished to give up farming within six to 10 years. Only 48% of all the respondents said they had someone to take over the farm from them.

Donald MacRae, chief agricultural economist with Lloyds TSB in Scotland, who conducted the survey, said the results also suggested an anticipated fall of just 8% in the number of farms over the next five years.

The farms of those who retired were likely to be used by expanding arable, dairy and beef enterprises.

One-fifth of the arable farmers surveyed said they aimed to increase their cereal acreage, and 41% of milk producers indicated that they planned to keep more cows. In the beef sector, one-third said they planned to expand production.

In the sheep and pig sectors, the numbers intending to keep more animals were outweighed by those who said they would cut numbers in the next five years.

Only 41% of farms made enough pre-tax profit to cover personal drawings in the last financial year. Livestock and mixed farms had struggled most, with only about a third making more money than they drew from the business.

There was a clear trend showing the advantages of economy of scale, with profit exceeding drawings in just 17% of farms with fewer than 100 acres, compared with 55% in farms with more than 1000 acres. &#42

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