Farm incomes rise by £1200 a year

Farm incomes rose by £1,200 a year to average almost £14,000, the latest figures from the Department for Environment, Food and Rural Affairs revealed today.

Farm incomes rose by £1,200 a year to average almost £14,000, the latest figures from the Department for Environment, Food and Rural Affairs revealed today.

Total income from farming rose by 12.9pc, as forecast in this morning's EDP, to £13,867 as a result of a better harvest last year and higher prices for cereals, potatoes and cattle.

The rising income figures are good news for farming and also for Britain but some significant short-term problems remain for the industry, said farmers' leader Peter Kendall.

“The underlying situation has improved significantly, thanks to a consuming public who are increasingly conscious of food miles and food provenance, the growing demand for biofuels both at home and abroad, and a tighter world food supply/demand balance,” he added.

Mr Kendall, president of the National Farmers' Union, runs a 1,500-acre cereal enterprise with his brother on the family's farm near Biggleswade, Bedfordshire. “While these figures give a clear indication that the tide is turning for British farming, there are still significant issues that need to be resolved if the industry is to exploit fully the opportunities that are out there,” he added.

The industry's total income rose by more than 10pc to £2.72bn but Defra's statistics for last year revealed that farming's future remains difficult.

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Derrick Wilkinson, senior economist at the Country Land and Business Association, said: “Much of the increase in the value of output was due to higher prices for cereals, largely a result of poor harvests elsewhere in the world. If we were to exclude the estimate of certain forms of diversified activities included in the figures, the total loss to farming would be nearer £1bn.”

Defra's figures showed that total income per head rose by £12,667 to £13,867 for an average full-time farmer although this falls well short of the average a decade ago when total annual income topped £23,000. Income peaked at £28,300 in 1995.

Highlights included

Cereal returns were 14pc higher than in 2005

Oilseed rape prices were 17.3pc higher - boosted by demand for bio-fuels.

Fresh vegetable returns rose by 9pc to £1bn.

Sugar beet prices fell by 38pc.

The CLA also calculated that when the single farm payment was deducted, the country's core farming business lost more than £200m.

Larking Gowen's 10th annual Harvest Survey, based on figures from 112 farms in the region, revealed an average profit of just £56.30 an acre, which included the £72 an acre single farm payment. In other words, the average farmer made a loss of £16 an acre.

Defra revealed last year that 2005 farm incomes dropped by 11.4pc in real terms and the industry was hit by increased energy costs of 18.7pc.