Farming: 2012 a disastrous year for Scottish farms

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Rising costs, bad weather and a swing in the exchange rate knocked £111 million off Scottish farm incomes last year according to figures released yesterday by the Scottish Government.

At £635m, total income from farming (TIFF)is 15 per cent down on 2011, with the big losers being potato growers whose crop has been estimate to be some £40m less than the previous year. Wheat growers have also taken a knock according to government statisticians, with a fall in output of £23m. Others who saw outputs fall include soft fruit growers, with a £20m fall in value.

On the livestock side, income from milk rose by 9 per cent and in store cattle by 17 per cent but this increase was not carried through to finished cattle, with only a marginal increase. Sheep output fell back marginally.

The other big fall in income this past year was in the single farm payment, as the exchange rate went into reverse – payments down 8 per cent from £602m in 2011 to £557m.

With these figures, total output from Scottish agriculture fell by £20m to £2.78 billion in 2012.

Meanwhile, costs continued to rise, the 10 per cent increase from 2010 to £2.66bn in 2011 being followed by a 3 per cent jump to £2.71bn last year.

The biggest cost increases were again seen in fuel and fertiliser expenditure, up 8 per cent in the former and 9 per cent in the latter, helping to squeeze farm margins.

NFU Scotland’s policy director Jonnie Hall said the figures confirmed what an abject year 2012 was for the majority of Scottish farmers.

“As we negotiate our way through CAP Reform and a new rural development plan for Scotland,\2 he said, “we need to make sure that measures come into place that make our members more resilient to fluctuating weather and volatile markets.”

Rural affairs secretary Richard Lochhead described the drop in income as “not unexpected” and turned his fire on how “out of touch” the UK government was, with Owen Paterson, the UK Secretary of State for Environment, Food and Rural Affairs, campaigning for the removal of support for food production and Scottish farming.

The accuracy of the figures released yesterday could carry a government health warning, as last year’s total TIFF figures were subsequently revised upward by £150m, some 25 per cent higher than initially announced.

More accuracy lies in the farm business income figures also released yesterday, relating to 2011-12 and based on actual farm accounts.

They show a marginal fall of 1 per cent to average £45,000 for all farm types.

Within that average figure, the biggest fall came on general cropping farms where income fell £20,000 to £50,000. Low ground sheep farmer also saw their incomes drop £7,000 to £24,000.

Winners were dairy farms, with income up £6,000 to £79,000, and specialist beef farmers, with income up £4000 to £37,000