While the value of the sector’s total output actually rose on the year, this was more than offset by an 11 per cent increase in the cost of agricultural inputs according to the analysis.
The Scottish Government’s Total Income from Farming figures drawn up by the National Office of Statistics showed that the sector’s overall income stood at close to £791 million in 2020 – a figure marginally below the ten year average of £793 million.
Total input costs to farming was estimated to stand at £3.14 billion, slightly up compared to the revised 2019 total input costs of £2.83 billion.
The report stated that the main causes of the increase were feed, labour and consumption of fixed capital. Smaller changes were seen for other inputs such as seed, with an increase in costs by nine per cent to 82 million. While fertiliser and lime costs increased by three per cent to £185 million.
Capital fixed costs also rose on the year – with much of this being attributed to a combination of take- up of the Sustainable Agriculture Capital Grant Scheme and increased demand for store cattle.
The figures showed that income in Scotland was similar, per hectare, to that in Wales and the least productive of England’s regions, North East England, while the better areas of England showed returns four times higher.