UK farming income hits £5.7bn – up 31% in a year
New Government figures which show farming is performing strongly, despite the ongoing struggles of the wider economy, have been welcomed by the industry in the Westcountry.
But increased costs in fuel, fertiliser and animal feed continue to make farming a challenging career.
The latest farm income figures released by the Department for Environment, Food and Rural Affairs (Defra) show the total value of UK farm output has increased by 15 per cent to £23.7 billion in 2011.
Farming's contribution to the wider British economy also increased 25 per cent year-on-year in gross value added terms to £8.8 billion, representing the strongest performance by the farming industry since the mid-1990s.
This was reflected by a 31 per cent increase in the bottom line for UK agriculture, as the total income from farming increased by £1.4 billion to £5.7 billion. In real terms, after adjusting for inflation, total income from farming is estimated to have increased by £1.1 billion.
Mel Squires, regional director of the National Farmers' Union (NFU) in the South West, said: "The positive headline performance by the industry is undoubtedly good news and a marked change to the decade-long lows we witnessed before 2008.
"Profitability underpins industry confidence and that generates investment in the agri-food supply chain, which in turn boosts the economy by creating jobs and economic growth."
But, she said, all farmers had noted dramatic increases in their cost base recently. The 2011 figures showed a 10 per cent overall increase in farm costs year on year.
For key inputs, the cost rises had been significantly higher. Fertiliser and animal feed prices increased by 26 and 21 per cent last year for example, and NFU members flagged rising input costs as their key concern when asked about business prospects.
"Farming's costs are some 53 per cent higher than they were just five years ago and continued rises in inputs will squeeze sector profitability," she said. "The industry already faces a challenge to maintain the improvements in output, with recent price cuts by milk processors and the post-harvest cereal prices on offer both putting pressure on future growth potential.
"But the figures point to an industry that is both thriving and growing its contribution to the national economy."
The figures came within days of the annual national congress of the Federation of Young Farmers' Clubs at Torquay, attended by 4,500 members, which heard industry leaders appeal for more entrants to the agricultural sector to capitalise on the resurgence in farming fortunes.