Majority of Scottish farmers 'foreseeing negative impacts' over Brexit, says survey

The majority of Scottish farm businesses are 'foreseeing negative impacts' from Brexit, according to a new survey.

Responses to accountant firm Johnston Carmichael's annual agricultural questionnaire revealed that farmers are preparing themselves for the changing landscape.

"This year Brexit has emerged as a key concern for farmers, particularly in relation to how it could affect subsidies, input costs, staff availability, land values and selling prices," said Neil Steven, partner at Johnston Carmichael.

"The Scottish agricultural sector remains very important to the national economy, as an income generator in its own right and as a critical supplier to associated industries such as beer and whisky, dairy products and abattoirs."

But the sector does see potential benefits to leaving the EU such as removal of red tape and the movement in exchange rates since the vote last year has given a 'welcome uplift' to most farm output prices in sterling terms.

Currency movements will continue to have a major impact on farm profitability in the future.

Outlook

Overall, the survey revealed that farmers’ and landowners’ outlook for the year ahead has lifted.

In 2017, some 35% of respondents had a positive outlook, and 15% negative, which compares favourably to 19% and 54%, respectively, last year.

However, half of the agribusiness population remains unsure of what the future holds.

"Additional income sources have helped to bolster the sector, principally through diversifying and investing in alternative enterprises such as renewable energy services - making use of on-farm resources and generating rental income for the landowner," Mr Steven said.

Succession plans

Looking to the longer term, there has been a slight increase in the number of farm businesses confirming they have a succession plan in place – up to 47% from 45% last year.

Mr Steven said: "Given the ageing demographic responsible for running much of the sector, with 59% of respondents to the survey over the age of 51, the number without that future plan in place remains concerningly high.

"The sector and its financiers need to consider how businesses could be structured and operated to better accommodate diversity in capital ownership, giving the younger generation the opportunity to get a footing within the industry.

"The next generation so often have the ideas, energy and aspirations to make a career within the industry, but not necessarily the financial capability to make the upfront capital investment required to convert that enthusiasm into operational viability and success."