Defra figures show total income from farming fell by 24pc between 2014 and 2015

A tractor ploughing near Brampton. Picture: DENISE BRADLEY

A tractor ploughing near Brampton. Picture: DENISE BRADLEY - Credit: Copyright: Archant 2016

Farming incomes slumped by 24pc between 2014 and 2015, driven by lower commodity prices and reduced subsidy payments caused by exchange rate fluctuations.

A report released by Defra shows the UK's total income from farming dropped by £1,247m to £4,003m in 2015. The new figure has been revised upwards from April's original estimate of £3,769m, but is still a 24pc drop compared with the previous year.

The total income per person working on agricultural holdings also fell by 24pc to £20,668, and agriculture's contribution to the nation's Gross Domestic Product (GDP) dropped by £1,129m – a decrease of 11pc.

The report attributes the fall to high production levels driving down commodity costs, and a strong pound during 2015 affecting the value of direct payments from the EU's Common Agricultural Policy, which are paid in Euros.

It says: 'Following poor weather in 2012 and 2013, the more favourable growing conditions of 2014 were upheld in 2015 encouraging good crop growth and record yields. However in 2015 whilst production levels were maintained, lower commodity prices due to increased global production and stocks resulted in a fall of 7pc in the value of outputs.


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'The pound further strengthened against the euro in 2015 and subsequently reduced the value of direct payments to farmers with the net value of Basic Payments (formerly Single Farm Payments) 6.5% lower in 2015 than 2014.

'Labour, rent and interest rises further contributed to the overall fall in Total Income from Farming.

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'Compared to 2011, a comparable year which was not adversely affected by the weather, outputs in 2015 were £1,041m lower. This was driven by significantly lower farm-gate prices which failed to offset higher volumes of production.'

Robert Sheasby, regional director for the National Farmers' Union in East Anglia, said: 'These figures aren't a surprise to anyone involved in the industry but they are extremely concerning, highlighting the financial pressures currently facing many farm businesses in East Anglia.

'They show a dramatic fall in farm incomes, even though farmers achieved record cereal yields in 2015.

'This doesn't just matter for farm businesses. It also means less money for the wider rural economy, less money for job creation and less money to spend looking after the environment.

'In the short-term, the figures demonstrate how important it is that the RPA (Rural Payments Agency) delivers on its promise to pay 90pc of BPS (Basic Payment Scheme) payments by the end of the year. This money is urgently needed by farm businesses.

'In the longer-term, they underline how vital it is that British agriculture is dealt with fairly when the government starts its negotiations for a post-Brexit Britain, particularly on the crucial issues of trade and access to labour.'

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