Scottish farmers face crisis of confidence

Following a strong 2013, Scottish farmers have seen their incomes fall dramatically last year which is causing a crisis of confidence in the industry, according to a new survey.

Total Income From Farming fell 18% in 2014 and the Bank of Scotland Agricultural Survey showed 51% of farmers felt their businesses will not be profitable this year.

Income from potatoes fell by £105 million to £170 million. Cereals fell by £46 million to £381 million.

Rural Affairs Secretary Richard Lochhead said: "Agriculture is the cornerstone of Scotland's rural economy and it is disappointing that farming incomes fell last year after such strong growth in 2013 - although I note the longer-term trend is more encouraging with farm incomes more than doubling since 1998.

"Last year's drop in farm incomes will come as no surprise given the dreadful budget deal negotiated by the UK Government and subsequent reduction in Single Farm Payments.

"Cereals have been hit by the fall in world prices, however it's good to see that our farmers have been at least partly helped by bringing in a bumper harvest and by the fall in fuel, fertiliser and seed prices.

"There was a good potato harvest but a fall in consumer demand has seen a challenging year for the potato sector, where we have also seen a fall in income.

"The Scottish Government continues to do what we can to create the right conditions for Scottish farming to flourish but clearly we would be able to do more had Scotland received in full the 223 million euro (£166 million) convergence uplift that rightly belongs to Scottish farmers."

Uncertainty about new Common Agricultural Policy (CAP) reforms was also having a negative impact on the Scottish farming industry.

The Bank of Scotland report said 70% of farmers rated the service as 'poor or very poor.'

"These are clearly testing times for Scottish farmers. The fall in confidence in this year's survey reflects the current backdrop of depressed agricultural prices," said Donald MacRae, Bank of Scotland's chief economist.