Economic Report on Scottish Agriculture, 2016

5.7 Mixed farms FBI (Table B1)

Accounting for inflation, between 2009-10 and 2014-15, the average FBI of mixed farms decreased by around 72 per cent, and by 80 per cent from the highest value over the series of £58,000 in 2010-11. The latest decrease was due to a reduction in crop area and livestock numbers in addition to a large decrease in the value of subsidy payments.

In the last year revenue for mixed farms decreased more than input costs. Coupled with a decrease in the value of subsidy payments, this has resulted in an overall decline in FBI value. The FBI value of mixed farms was £12,000.

The average FBI/ FTE for mixed farms of £7,000 is equivalent to an hourly wage for unpaid labour of £3.74, around half the minimum agricultural wage ( MAW) in Scotland. Around 54 per cent of mixed farms generated incomes equivalent to less than the MAW, whereas one per cent generated over five times the MAW.

At £46,000, on average, high performing mixed farms generated incomes roughly four times the overall average. Low performing farm businesses made an average loss of £28,000.

The total average revenue for mixed farms, including income from diversification and subsidy payments, was £206,000. Spending on inputs averaged at £195,000. The largest portion of the input costs was due to "other inputs" such as machinery, land and buildings, and feed costs.

Over the last five years, if subsidy payments were excluded, average FBI has been on a generally downward trend, and with losses recorded in each year, with the exception of 2010-11 when it perhaps recorded a negligible profit. In 2014-15 it reached the lowest level over the series, recording a loss of £27,000.

Over the last year cost centres for mixed farms show decreased income as part of agricultural and contracting activities, as well as from direct payments. There has been little change in other cost centres.

The average net worth (assets minus liabilities) of mixed farms was £1.5 million in 2014-15. The average debt ratio (liabilities:assets) remained unchanged at 10 per cent, but ranged between seven per cent for owner-occupied farms and 25 per cent for tenanted farms.

Mixed Farms