Incomes from commercial farms in Scotland rose 19% to £35,400 in 2017-18, the highest level in six years, according to the latest statistics published by Scotland’s chief statistician.
The latest annual figures shows that agriculture is still dependent on farm subsidies.
Dairy farms experienced the largest increase of average income to show an average of £73,100.
This increase in income was largely due to a 22% increase in the average price of milk, to £0.28 per litre.
The latest statistics show that subsidy payments from the EU play an important role in farm incomes.
More than 60% of farms in the survey were making a loss without subsidy, with the average business making a loss of £7,400 without support.
Farms that had expanded beyond traditional agricultural work, such as renting out buildings or holidays homes and building small wind farms to generate electricity, had incomes that were around £19,600 higher compared to those that have not diversified.
However, for farms where diversification and contract farming opportunities are reduced, such as sheep farms and beef farms in Less Favoured Areas (LFA), they continue the historical trend of having the lowest incomes.
These farms are estimated to be making a loss of £27,400 without support.
The average net worth of Scottish farm businesses is estimated at £1.3 million.
The amount of assets held by farms has decreased slightly over the previous three years, while the amount of debt has risen slightly.
However, the average debt levels are fairly low with liabilities equal to 12 per cent of the value of assets, indicating no immediate concerns with the rising levels of debt.
These statistics are based on annual audits of nearly 500 commercial farms in Scotland called the Farm Business Survey (FBS).