Farm incomes fall by 10%

31 January 2001



Farm incomes fall by 10%

By Robert Harris

FARM incomes have slumped by 10% in the past year, according to new Ministry of Agriculture figures.

Average net farm income — the return to farmers and spouses after family labour — tumbled to just 5200 a farm.

It is the fifth year in succession that incomes have fallen. In 1999, average NFI per farm was 5700, and 7700 in 1998/99

MAFF statistics show that farm sales fell by 4.5% on the year, or 729m, to 13.2bn, largely due to the strength of the against the during the year.

The overall cost of inputs fell by 112m to about 11.4bn, with the biggest saving coming through the huge drop in the UKs agricultural workforce.

Numbers of workers fell 29,000 in the year to June 2000, bringing labour costs down 11% to 1.85bn

Animal feed costs fell to 2.2bn, mainly due to falling cereal prices, allowing farmers to claw back another 93m, while pesticide prices fell 12% to 305m.

This was offset by a 40% price hike in red diesel, following reduced pumping by petroleum exporting nations which added 158m to costs.

Fertiliser prices also rose (up 12% to 826m), and interest payments rose by 13% to 81m, reflecting the increase in borrowing on many farms.

The cereal sector bore the brunt of the downturn — average NFI slumped 61% over the year to just 4400 a farm.

Farm-gate milk values fell by about 1.4p/litre on average, wiping 273m, or 10%, off output values. The average producers NFI dropped 17% to 7500.

Lowland cattle and sheep farms continued to suffer from poor prices and high BSE-related charges, only breaking even.

But their counterparts in the hills did slightly better, although NFI remains at a paltry 3500.

Pig and poultry also fared much better, as expected, following the increase in pig prices over the year, and boosted by loss-making farmers leaving the industry.