Scottish farm incomes took 48% of a hit in the space of one year, according to UK-based publication Farmers Guardian.
Farmers Guardian reported that, as a result of rising costs, falling supports and poor farm-gate prices, the incomes for the 2015-2016 period almost halved according to Farm Business Income (FBI) indicators.
The 2015-2016 income was recorded as the lowest in six years, decreasing 75% (£38,200) in real terms since 2010-2011. According to the report, when FBI is calculated without the addition of subsidy payments, the value results in a loss of £25,500.
Dairy farm incomes suffered the biggest fall. This was mainly due to the average milk price dropping 30p/L to 21p/L.
Mixed farms also took a substantial hit, falling by 81% (net). Less common sectors such as pig, horticulture and poultry enterprises were not covered by the FBI survey. The least impacted sector that was documented was tillage; general cropping farms were down 11% – with an average income of £24,000.
One of the most telling findings of the results was the fact that, when taking into account unpaid labour by farmers and other stakeholders, 59% of farms would be unable to pay the minimum agricultural wage due to insufficient income.
The National Farmers’ Union Scotland (NFUS) has used the report as evidence of the inadequacy of the current system for farmers.
The NFUS Director of Policy, Jonnie Hall, said:
Farmers and crofters continue to face rising input and compliance costs, declining market returns and an erosion of support payments that are conspiring to threaten the very existence of many.
Hall urged the British government to guarantee that it would prioritise farming business in all new trade deals, as well as calling for it to commit to continued supports for farm viability.
Hall also called out the Scottish food and drink industry on the current imbalance between processors and retailers compared to farmers – in terms of profit division. He noted that the industry “must start to deliver for those at the farm-gate and who have seen their incomes fall by more than 75% since the start of the decade”.