Farm Business Survey 2018-2019: profitability of Scottish farming

Overview and Context

• This Official Statistics report provides additional analysis of Scottish Farm Business Income data. It provides detailed analysis of the profitability of farms in the supported sectors of agriculture, income from non-agricultural activities, support through the Common Agricultural Policy (CAP) and other payments, and long term profitability of Scottish farm businesses.
• The Farm Business Survey does not collect information on non-supported sectors which include pigs, poultry, some fruit production and horticulture. Unless otherwise indicated, these sectors are therefore excluded from the analysis in this report.
• Separate statistics published in the Total Income from Farming (TIFF) report provide analysis of the profitability of the industry as a whole, including non-supported sectors. However, this data source does not enable the level of granular analysis provided by the Farm Business Survey. The results from TIFF are summarised in section 3.1 to provide wider context.

Key Findings from the Farm Business Survey

• In 2018-19, the average Farm Business Income (FBI)^[1] (sometimes called farm business profit) in Scotland was around £39,000. Of this, on average £34,000 came from farming and support payments, and £5,000 came from diversified, non-agricultural activities. When support payments and diversification are excluded the average farm made a loss of around £9,000.
• The average farm received around £43,000 from CAP support and other payments. The majority of this support is through the CAP Basic Payment Scheme, which made up round 70% of the average farm support.
• Scottish farm profitability is highly variable across farm types, regions, and tenures and many farms rely on grants and subsidies to make a profit:
  • Without CAP support and other payments, 28% of farms turn a profit.
  • With CAP support and other payments, 72% of farms turn a profit.
• For some farms, profitability from farming is not the driving factor:
  • Over the last five years around 30% of farms were never profitable when support payments are excluded. Including these payments, 2.5% of farms were never profitable over this period.
  • Around 30% of farms were profitable every year when support payments are included^[2].
• Dairy, cereal and general cropping farms are generally more profitable and receive lower average support payments.
• Livestock farms in less favourable areas are least profitable and receive the highest average support payments. Large areas of less favourable area land in Scotland limits the expansion potential of more profitable farm types.