Economic Report on Scottish Agriculture, 2016

4.4 General cropping farms FBI (Table B1)

Accounting for inflation, between 2009-10 and 2014-15 the average FBI of general cropping farms decreased by around four per cent, and by 65 per cent since the peak in income of £77,000 in 2010-11. This was due to a decrease in the revenue value of crops and a fall in the value of subsidy payments.

In the last year both spending on inputs and revenue for general cropping farms have decreased. As revenues fell by considerably more, the effect has been an overall decrease in income for 2014-15 to leave the FBI value of general cropping farms at £27,000.

The average FBI/ FTE for general cropping farms of £20,000 is roughly equivalent to an hourly wage for unpaid labour of £10.50, almost equivalent to one and a half times the minimum agricultural wage ( MAW) in Scotland. Around 45 per cent of general cropping farms generated incomes equivalent to less than the MAW whereas 12 per cent generated over 10 times MAW.

At £69,000 on average, high performing general cropping farms generated incomes more than two and a half times the overall average. Low performing farm businesses made an average loss of £6,000.

The total average revenue for general cropping farms, including income from diversification and subsidy payments, was £232,000. Spending on inputs averaged at £205,000. The largest portion of the input costs was due to fertiliser and "other inputs" such as machinery and land and buildings.

Over the last five years, FBI without subsidy payments has been on a general downward trend, with partial recovery in 2012-13. Recently, it has recorded losses since 2013-14. Over the six year time series, the figures ranged from a loss of £22,000 in 2009-10 to a profit of £28,000 in 2010-11. In 2014-15, FBI without subsidy payments was a loss of £6,000.

Over the last year cost centres for general cropping farms show decreased income from agricultural activities and direct payments, but little other change.

The average net worth (assets minus liabilities) of general cropping farms was £1.9 million in 2014-15. The average debt ratio (liabilities:assets) increased by one percentage point in 2014-15 to eight per cent for general cropping farms and ranged between eight per cent for owner-occupied and 18 per cent for tenanted farms.

General Cropping Farms