Union sees tide

4 December 1998

Union sees tide

turning despite

diving incomes

By FWreporters

ALTHOUGH net farm income this year is estimated to have plunged by 51%, with more than £1.6bn wiped off the value of the industrys output, NFU bosses are increasingly optimistic that the tide is turning and that recovery is on its way.

MAFF forecasts of the total income from farming for 1998, released on Tuesday, showed a 35% drop in real terms. But when family labour is also taken into account, to give the net farm income, NFU chief economist Sion Roberts said the fall in real terms was 51%, on the back of a 47% drop last year.

In a separate set of figures, MAFF also announced that hill farming income for 1998/99 was likely to have fallen 67% on last year, leaving the average income for producers in less favoured areas at just £2,400, or 17% of its level two years ago.

The figures, however, do not include governments £120m aid package, most of which will go to the uplands.

"Over the past two years we have seen a drop of £3.5bn in the value of the industrys output. While this year we have seen a reduction in costs of things like feed, fertiliser and pesticides, the cost and volume of borrowing and labour costs have risen," Mr Roberts said.

The income figures were the lowest in real terms since the 1930s but Mr Roberts said there were signs that the timing of the recent £120m government aid package, could mark the low point in the recession.

Optimism that things could get better from now was driven mainly by the 5% weakening in sterling in the past six months and the lifting of the beef ban.

Commenting on the hill income figures, NFU president Ben Gill said the average net income of upland farmers had fallen to only 16% of its value before the BSE crisis.

"It proves beyond a shadow of doubt that the governments recent aid package for hill farmers was an extremely necessary and timely measure which will have prevented many farm businesses from folding," he said.

Before the emergency aid package net farm incomes of Welsh disadvantaged area cattle and sheep farmers would have been 66% down.

Welsh Office income projections indicate that in all areas of Wales which include 80% of farmed land, net income had plunged to £5400 or £2800 when aid payments were discounted.

The drop in Scottish farm incomes for the calendar year 1998 is estimated at 42% suggesting a total income from farming of £210m compared with £363m in 1997.

Estimates of hill farm incomes, based on the fiscal rather than calendar year which include the November aid package show a projected net farm income for all LFA livestock farms of £5900, down 28% on the previous year.

Without the recent aid package, the drop on the year would have been 73% and incomes only £2,200.

See more