Livestock farms are more reliant on support payments

Support payments play an important role in farm income. Around 83% of all farms made a profit in 2022‑23 when income from support payments is included. Without support payments this proportion would decrease to 50% of all farms.

The importance of support payments varies by farm type. With support there is less variation in the proportion of farms that break even (have farm business income greater than zero). Without support payments far fewer livestock farms make any profit, especially those in less favoured areas (LFA).

Despite the increase in average income, the proportion of farms which were profitable with support payments increased only slightly, from 82% reported in 2021-22 to 83%. The proportion of farms profitable without support payments increased from 45% to 50%.

Both lowland and LFA cattle and sheep farms saw a decrease in the proportion of farms which were profitable without support payments. For lowland cattle and sheep, this proportion fell by 24 percentage points to 19%, whilst for LFA sheep and cattle, the proportion decreased by 2 percentage points to 24%.

For farm types that experienced large income increases on average in 2022-23 nearly all farms would have been profitable without support.

Figure 8: Proportions of farms which were profitable, by farm type, 2022‑23.

LFA land is low quality and often very hilly, mostly found in very remote areas. There is less opportunity to do anything else with the land which makes it difficult to do any other activities.

Support payments are a key source of revenue for a large number of LFA farms. Current support payments are intended to allow farms to remain in business and be an active part of their local community.