Rising costs and poor realisations lead to stagnating farm incomes
At a time when the Welsh Assembly Government is proposing to do away with, or significantly reduce, support to 80% of Wales through revisions to the Tir Mynydd Scheme, the National Assembly for Wales has released figures that forecast a fall of 2% in Less Favoured Area (LFA) farmers' incomes in 2005/2006 following a fall of 10% in 2004/05.
According to National Assembly for Wales statistics issued this week on net farm incomes, the average LFA net farm income is forecast at just £14,000. Farm income on lowland livestock farms fall to an average £3,600 with dairy farm income continuing to stagnate.
NFU Cymru President, Dai Davies said, "The Assembly's own figures reveal the sorry state of farming in Wales. The Welsh Assembly Government talks about sustainability but without economic sustainability, environmental, social and cultural sustainability are dead in the water!"
Total Income From Farming (TIFF) figures have also been released by the National Assembly for Wales this week. They reveal that in 2005 farm incomes dropped by 14.4% as a result of rising costs over the past 12 months with farmers unable to pass these increases up the supply chain.
Energy costs are a major area of concern with expenditure on energy inputs rising in the past 12 months. Above average increases were also recorded on machinery which were up by 10.9%, fertilizers up by 16.6%, labour an increase of 4.5% and the costs relating to servicing debts and bank transactions (9.7%). The figures reveal that farmers were unable to recoup these increases through the market, as farm gate prices either remained steady or fell over the past 12 months.
NFU Cymru President Dai Davies said, "What these figures reveal is that we're farming better than ever before. In most areas farmers have actually increased efficiency and production but sadly these efficiencies are going largely unrewarded as a result of rising costs and a food chain which fails to respond. It's like being stuck on a treadmill, as an industry we've upped the tempo but we're still not being allowed to move forward.
"At a time of relative financial growth in other sectors farmers are being denied a fair return and it is high time the retailers, processors and competition authorities recognised that farmers, like anyone else in business, must be allowed to pass on increases in the cost of production. We will be pushing for this situation to be rectified and will take any signs of downward price pressure from those further up the supply chain extremely seriously. "
