Farm income plummets by £737m in 2012

NEW figures have revealed the true cost of the abysmal 2012 season.

Defra farm income figures show a 14 per cent decrease in the bottom line for UK agriculture, as the total income from farming (TIFF) decreased by £737million in 2012 to £4.7billion. 

NFU chief economist Phil Bicknell said the grim picture would be no surprise for anyone in the industry.

He said: “The UK recorded its second wettest year ever in 2012, and no farming sector was immune from the weather. I also expect these headline figures to hide tremendous variation between regions.”

Mr Bicknell also warned of the continuing impact of the inclement weather on farming finances. 

“On top of delayed planting last autumn, crop development has been slow and spring planting is behind schedule in many parts,” he said.

“For livestock producers, the immediate concern is a lack of fodder after a long winter, which follows on from higher feed bills in 2012. We may only be four months into the year, but the pointers are for UK farming profitability to be further squeezed in 2013.”

NFU president Peter Kendall said falling farm profitability ‘shatters the myth’ that high commodity prices would mean high profits.

“It is vital that farmers’ turn a profit and that they re-invest,” said Mr Kendall.

“The reality is that low profitability and falling confidence does not provide a secure framework for a sustainable food industry.”

He said the recent extreme weather conditions had highlighted the importance of CAP payments.

“With profits squeezed, a larger number of farmers will again be forced to rely on CAP’s direct payments to underpin their business in the year ahead,” added Mr Kendall.

“Managing risk and volatility are both key and that must be recognized by the government in its CAP negotiations and in pricing decisions taken by the food chain.”

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