Deloitte warns of unpredictable times ahead for farmers
A new report from consultancy firm Deloitte argues that the UK’s farmers face an unpredictable future, with the vagaries of the global market increasingly affecting returns on food production.
It is not all bad news for farmers though; as the report also points to increasing revenues from non food production activities and stresses that professional farmers can still make a good living.
Deloitte produces its Farm Results survey ever year based on an analysis of the financial accounts of farms that represent around 100,000 hectares of lowland England.
Today’s results show a boost to farming income last year with net income per hectare rising to £200, up from just £43. However, it estimates that the income boost will be short lived, and that next year the figure will be around £84.
Its head of food and agriculture, Mark Hill, said: “For a 400 hectare farm, this means net farm income over three years will have swung from £17,000 to £80,000 and back to £33,600. This income has to support the farmer’s family and fund future investment in their business.”
Cited reasons for the predicted fall are this year’s difficult harvest, lower prices and continued pressure in the dairy industry.
Continuing, Mr Hill said: “A picture is emerging of Britain’s farms being supported by three different sources of revenue. First, the fortunes of traditional arable and livestock food production will be subject to very large swings due to the vagaries of global market and the weather. Second, income from a range of diversification investments will be increasingly important. Third will be EU income derived from agri-environmental activity and landscape management.
“In short, incentives to Britain’s farmers will subtly change from food production to countryside stewardship. Just what this will mean for UK (and EU) self-sufficiency remains to be seen. However, the general public can look forward to low food prices and a well-managed countryside.
“The professional can still make a good living. Our top farmers can expect to generate net farm more than twice the average. We believe this level of return should be sufficient to invest in the continued development of the industry.
“However, like the rest of the industry, they will have to cope with the substantial annual swings in prices and weather patterns.”
