'Hugely detrimental impact of low prices': Farm incomes decline by nearly a quarter in Wales
Figures released by Welsh Government this week highlight the 'hugely detrimental' impact that low commodity prices have had across all key farming sectors in Wales, according to NFU Cymru.
The figures are based on the results of the Wales Farm Business Survey for 2015-16 (up to March 2016), and average farm business income across ‘All Farm Types’ fell by £6,800 to £22,200 - a decline of around 23%.
This is the third consecutive year for farm incomes to fall.
For dairy farms, average farm business income fell by a massive 53% with lowland cattle and sheep farms falling by 40% and (Less Favoured Area) LFA cattle and sheep farms down by 1%.
NFU Cymru President Stephen James said the figures 'come as no surprise' to farmers.
“The fall in farm gate prices - in particular for milk and lamb over the reporting period - has resulted in this dramatic fall in farm incomes and puts pressure not just on farming businesses but also on rural businesses and the rural economy that rely on farmers for much of their income.
“The impact on farming families is even more starkly highlighted by the net farm income figures for 2015-2016. Net farm income is the return to the farming family for their labour after costs such as rent, depreciation and interest payments, and this income fell by around 37% to £11,000.”
BPS remains important
The figures, derived from the Aberystwyth University Farm Business Survey team, highlight that Basic Payment Scheme (BPS) payments are important in helping to compensate farmers for market failure, to help manage price volatility and to reward high standards of farming.
Mr James added: “I commend Welsh Government for their excellent delivery of nearly 90% BPS payments on the opening day of the payment window this December. However the remaining payments must be made without undue delay, including payments to our cross-border farmers. This support is crucial to help farmers through current difficulties.
“Regulation is a cost to all businesses and the figures show that the industry is not in a position to take on more costs. I urge Welsh Government to consider the impact that the introduction of new NVZs and additional TB cattle controls will have on an industry that cannot afford to pick up the bill associated with additional regulation.
“We also need improved returns from the market place, we have seen and continue to see upward movement in milk price and we are pleased that a number of retailers in recent months have made positive commitments across a number of sectors to source more Welsh and British produce.
Mr James concluded: “The figures also further emphasize the need for favourable government policies post-Brexit. All our efforts must be focused on developing policies that underpin food production in Wales and also on securing funding arrangements that ensure we remain competitive in UK and EU markets.”
