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Farmers profits lowest since the 1930s

- 09 October 1998
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09 October 1998

Farmers’ profits lowest since the 1930s


FARMERS have suffered their biggest drop in income since the agricultural depression of the 1930s, according to a report by accountants Deloitte and Touche.

Average profits fell to £123 a hectare (£50 an acre) in the year to June, a decline of 56%. The average profit is now the same in money terms as nine years ago, when the firm began an annual income survey.

Taken with a smaller income decline in 1995-96, profits have fallen by 66% over the past two years. The survey predicts a further 48% drop in profits, to £64 a hectare, during 1998-99, bringing the total decline over three years to 82%.

The survey was based on 300 of the accountants farming clients. Deloitte said the situation would have been worse for farmers without the cushion of European Union subsidies. They estimated that 82% of their clients would not have made any profits at all without that support.

Even the richest and mot efficient 25% of farming businesses had a 42% drop in profits last year.

Vincent Hedley Lewis, the firms national agricultural partner, urged farmers not to panic. “It sounds disastrous, but for those who restructure their businesses correctly, it will be a time of opportunity,” he said.

He expects to see farmers who do not wish to lose control of their businesses move towards greater pooling of equipment and know-how through partnerships.

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