Volatile weather drives a 'concerning' drop in farm incomes

A combine harvester at work at Thrigby. Picture: DENISE BRADLEY

Defra's Farm Business Income forecast for 2020/21 predicts falling incomes for many East Anglian agricultural sectors - Credit: Denise Bradley

Volatile weather is among the factors driving a predicted drop in income for some of East Anglia's key farming sectors, says a government report.

Defra has released the provisional figures for its 2020/2021 Farm Business Income forecast.

While grazing livestock and poultry farms are expected to see incomes rise, Defra anticipates a drop in average income of 43pc for cereal growers, 35pc for general cropping businesses and as much as 87pc for pig farms.

The report says challenging weather conditions, including the extremely wet autumn and winter of 2019 and the spring drought of 2020, were a key factor for arable farms, with lower yields and crop areas driving a reduction in output despite higher prices for many crops compared to the previous year.

Most livestock sectors are predicted to see a rise in income, due to "firm prices and strong domestic demand".

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But the exceptions are dairy farms (down 10pc) and particularly specialist pig farms, whose average business income is forecast to fall from £37,700 to around £5,000 - a decrease of around 87pc.

The report attributes this mainly to a rise in feed costs, linked to the rise in cereal prices, while average prices for finished pigs are expected to "move to a downward trend from the summer of 2020 onwards, with Covid-19 related challenges a contributing factor".

The pandemic brought the pig sector to crisis point at the end of last year after coronavirus outbreaks delayed production at meat processing factories, generating a huge backlog of overweight pigs.

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Gary Ford, East Anglia regional director for the National Farmers' Union (NFU) said the new figures were "concerning" - especially as farm businesses face an imminent reduction in their Basic Payment Scheme (BPS) subsidies, which are being phased out in favour of a new post-Brexit Environmental Land Management Scheme (ELMS), still being developed, which will reward farmers for efforts to improve the landscape for nature.

"Volatility is something farmers are used to managing but it doesn’t make it any easier to deal with, especially while there is so much uncertainty about the future," he said.

"Industry uncertainty was revealed in the NFU's recent business survey, which showed confidence is already low among farmers, largely due to the changes in agricultural policy and the continued lack of clarity over the new schemes.

"It’s crucial that the Agricultural Transition Plan not only supports farming in the move from BPS to ELMS, but also provides the productivity improving measures, such as grants and investment in R&D, it has promised so we can build resilience, profitability and sustainability across all sectors."

Defra has published its provisional Farm Business Income forecasts for 2020/21

Defra has published its provisional Farm Business Income forecasts for 2020/21 - Credit: Defra

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