Income figures reveal dangerously unbalanced farming industry

The farm income figures for 2007, published by Defra today, provide a snapshot of an increasingly unbalanced industry, says the NFU, with arable profits increasing, while livestock farms continue to struggle.

Farm incomes overall showed a useful further improvement, of around ten per cent.

But that masks a huge variation in the performance of the various sectors, with the sharpest increase in cereal prices in recent years being the dominant influence.

This is forecast to boost profits on cereal farms by 38 per cent in the 2007/08 financial year. But it has also decimated incomes on pig and poultry farms. The average pig farmer will make a loss of over £4,000 this year, while poultry farmers have seen their profits slashed by more than 90 per cent.

The grassland livestock sector has also had an extraordinarily difficult year, caused by a combination of the market disruption which followed the outbreaks of foot and mouth and bluetongue disease in the autumn, and which added to the woes of a lamb market already depressed by badly phased New Zealand imports.

This has resulted in forecast income falls of 34 per cent for lowland livestock farmers, and of 44 per cent for hill farms, to just £8,700 and £5,900 respectively per farm.

Horticulture had an up and down year, with higher prices for fruit and vegetables making up to some extent for a difficult, flood-affected growing season, and dairy incomes are forecast to rise by 44 per cent thanks to a long overdue increase in milk prices since the middle of 2007.

NFU President Peter Kendall said the figures demonstrated how important it was for the livestock sectors to recover, if the industry as a whole was to make its full contribution to securing Britain's food supplies.

"Although an increase of ten per cent in net farm incomes looks like a worthwhile move forward, where we are now is neither healthy nor sustainable for the long-term.

"We desperately need to bring the industry back into balance, through a phased increase in producer prices for beef, lamb, poultry, eggs and pigs. The alternative will be the emergence of a boom, bust cycle, which could de-stabilise the arable sector as well as ultimately fuelling food price inflation by leaving us dangerously dependent on increasingly expensive imports."