Farm incomes down by 15%
Figures released on 14th December by the Department for Environment, Food and Rural Affairs (DEFRA), suggest that farm incomes for 2018 will be down by some £860m, a reduction of over 15%.
Total income from farming (TFI) is a measure of farm profitability, which assesses the return to farming businesses before proprietors’ own labour cost, deemed interest or deemed rent. As such it will be broadly similar to the profit figures shown in a set of partnership or sole trader’s normal financial accounts.
During 2018, DEFRA saw a modest increase (3%) in the value of livestock sales and a 1% decrease in the value of arable crops, but these were more than outweighed by a 6% increase in direct costs (seed, feed, sprays etc.) and continuing increases in overheads (which are not fully analysed within this preliminary report).
Commenting on the news, our Rural partner Andrew Perrott said “Coming against a backdrop of future reductions in direct subsidies, and uncertainty as to commodity pricing post Brexit, this report underlines again the need for clarity from government. We know that we are moving into an era of “public money for public goods” but farmers need to know just how much public money will flow into the proposed Environmental Land Management schemes so that they can make appropriate long term plans”.
Read the full report here.
This first appeared on one of our member firms, MHA Monahans.
If you would like to discuss this in more detail please email Tracey Richardson.