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Farm Income Figures Underline 2012 Difficulties

The publication of Scotland’s farm income estimates have underlined how difficult and costly 2012 has been for the majority of Scottish farm businesses.

The poor weather has hammered output, costs have soared and exchange rates have reduced support payment values.  All have had a hefty impact on Scottish farms from which recovery will be sluggish.  

Commenting on the release of the Scottish Farm Income Estimates 2011/12, NFU Scotland's Director of Policy and Regions Jonnie Hall said:
"The headline figures simply confirm what an abject year 2012 was for the majority of Scottish farmers and one that they will be keen to forget and move on from.

"A combination of weather-affected output, surging costs and lower exchange rates have stripped more than £110 million out of Scotland's total income from farming (TIFF) when compared with a year earlier.  A fall in TIFF of 15 percent to £635 million is a financial hole that will take a significant period of time to recover from.

"The value of our outputs in 2012 may only have fallen back by one percent or £20 million to £2.78 billion.  However, the drop in 2012 output was outstripped by a two- percent increase in costs that followed hard on the heels of a 12 percent increase in costs the year before.  In total, costs of production to Scottish farming are up by almost £300 million to £2.71 billion in 24 months.  That level of increase makes accurate budgeting at a farm business level very difficult to achieve.

"And by way of a double whammy, falling Euro rates had a significant impact on the value of Scottish farm support payments, down by £45 million in the year to £557 million.

"Ongoing difficulties in the pig and lamb sectors, poor autumn and spring sowing conditions and continued concerns over milk prices have all meant that the last few months of 2012 and the start of 2013 have struggled to raise spirits at farm level.  And the weather continues to do Scottish farming few favours.

"Our Wet Weather Survey, carried out in late 2012 highlighted a number of measures that would make a difference at farm business level.   As we negotiate our way through CAP Reform and a new rural development plan for Scotland, we need to make sure that measures come into place that make our members more resilient to fluctuating weather and volatile markets."

Notes to Editors

  • Scotland’s Chief Statistician has published the latest estimates for farm incomes in Scotland.  This publication contains full estimates of Total Income from Farming (TIFF) for the calendar year 2011, together with initial estimates for 2012, as well as average Farm Business Income (FBI) estimates for the financial year 2011-12 http://www.scotland.gov.uk/Publications/2013/01/5652
  • Total Income from Farming (TIFF) increased by £58 million to £746 million between 2010 and 2011. This is an increase of eight per cent before inflation is accounted for and an increase of three per cent in real terms.
  • Initial estimates suggest that TIFF has fallen by £111 million to £635 million in 2012, a 15 per cent fall before inflation is accounted for, or 19 per cent in real terms.
  • Within TIFF, outputs increased by £310 million (twelve per cent) from £2.49 billion in 2010 to £2.80 billion in 2011, but reduced by £20 million (one per cent) to an estimated £2.78 billion in 2012.
  • Costs rose £252 million (ten per cent) from £2.41 billion in 2010 to £2.66 billion in 2011, and by an estimated £46 million (two per cent) to £2.71 billion in 2012.
  • The size of payments and subsidies are mainly dependent upon the Euro exchange rate applied to EC farm payments. The total figure decreased only marginally in 2011, but fell by £45 million (eight per cent) from £602 million in 2011 to £557 million in 2012.
  • The main contributors to changes between 2010 and 2011 were
    • the output value of barley increased by £80 million
    • the output value of finished cattle and calves increased by £57 million
    • the input cost of feedstuffs increased by £66 million.

Ends

Contact Bob Carruth on 0131 472 4006

 

Date Published:

News Article No.: 10/13


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