The incomes of commercial farms in Scotland are estimated to have halved over the four years to 2014, according to the Scottish Government.
Estimates from the Scottish Government’s annual Farm Accounts Survey show that average farm business income (FBI) fell by 25% between 2013 and 2014 to £23,000.
Income has been falling since a peak in 2010 and since then, commercial farms have suffered a fall of 55% — £28,000 — from an average of £51,000.
The latest figures, released by Scotland’s Chief Statistician, are based on annual audits of 500 commercial farms in Scotland.
The main factor behind the fall in incomes has been the reduced value of crops, which fell by £18,000 on average in 2014.
Lower subsidy payments — £7,000 lower on average — also played a huge part in the decline of farm business incomes.
Over the longer term, rising input costs for livestock, such as feed, as well as costs for machinery, land and buildings have also affected profitability.
“Provisional national level income estimates released in January showed a £60 million decrease in income from the farming industry in 2014, followed by an estimated £110 million decline in 2015, including a £40 million reduction in subsidy levels,” said the Scottish Government.
“While cattle prices remained steady in 2015, milk, potato, cereal and lamb prices fell.
“This suggests that the fall in farm incomes may have worsened since the period covered by today’s business level estimates.”
In 2014, the average income for general cropping and cereal farms fell by 25% and 38% respectively.
The largest 2014 decline in average income was seen in some sheep farms where incomes were halved compared to the previous year, and mixed farming where incomes fell by almost two thirds.
The average net worth of Scottish farm businesses is estimated at £1.3 million.
The report is based on the findings from the Farm Accounts Survey, does not include information on pig, poultry and horticulture sectors.