Welcome for uplift in farm incomes

FARMERS' leaders have welcomed new figures which reveal rising UK farm incomes for 2006-07 following a “tough and prolonged period” of low returns.

FARMERS' leaders have welcomed new figures which reveal rising UK farm incomes for 2006-07 following a “tough and prolonged period” of low returns.

The Department for Environment, Food and Rural Affairs yesterday released provisional estimates which showed total income from farming rose to £2.75billion, or 7% in real terms compared to the previous year.

It was a welcome boost for the industry, which saw incomes drop to an all-time low in 2000, followed by a slight recovery, then a further dip in 2005.

Higher costs were more than offset by increases in the value of produce, particularly cereals, potatoes and cattle. Notable exceptions to this, however, were sugar and milk.

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Nicola Currie, Country Land and Business Association eastern regional director, pointed out that much of the increase in the value of output was due to higher prices for cereals, largely due to poor harvests and drought elsewhere in the world.

“The demand created by the US biofuels programme has underwritten the world market for cereals,” she said. “It would be interesting to speculate how much greater this impact would be if this country were to create a similar initiative.

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“There were also welcome increases in the value of output in most other sectors, especially beef and potatoes, but with notable exceptions in fruit, milk and sugar.

“However, after a really tough and prolonged period it is good to pick up that there is a sense of cautious optimism again from our members.”

National Farmers' Union East Anglia regional director Pamela Forbes said the improved farm income figures were “good news” for most farmers in our region, although they were still less in real terms than farmers received in 1986.

“There are short-term problems to tackle to ensure the improvement continues, particularly for our dairy, pig and poultry farmers. But we have started the year with a genuine sense of optimism that the tide is starting to turn,” she said.

“There are opportunities to take full advantage of the growing demand for high quality, local food and the drive to develop a home-grown biofuels industry - and our members are determined to do so.”

Derrick Wilkinson, senior economist at the CLA, warned there were still difficult times ahead for the industry.

“When we deduct the new, decoupled Single Farm Payment from the figures we see that the core business of farming still lost £209million and if we were to exclude the estimate of certain forms of diversified activities included in the figures, the total loss to farming would be nearer £1billion,” he said.

The value of cereal production grew by 14% to £1.6billion, while the value of production of oilseed rape also rose by 17.3% as a result of high prices, but sugar beet fell by 37.4%.

Fresh vegetable values went up by 9.1% to £986million in 2006, but the value of plants and flowers fell by 4.4% to £744million.

While production of potatoes fell due to a fall in yields, prices rallied from the low levels seen in 2005 to give a 24% increase in the value of production, which reached £625million.

The value of fresh fruit production fell by 1.2% to £377million, with an increase for orchard fruit offset by a decrease in soft fruit due to lower prices.

The livestock sector saw the value of is production rise by 7.5% to £5.2billion, with the value of cattle production increasing by 12.9% to £1.6billion as the Over Thirty Month Scheme came to an end, and the ban on UK cattle and beef exports were lifted.

The value of sheep and lambs went up by 2.7% to £702million in 2006, while poultry rose by 1% to £1.3billion and pigs increased by 1.3% to £687million, the highest value seen since 2002.

Milk production values fell by 3.6% to £2.5billion, due mainly to lower prices, while the value of egg production went up by 2% to £357million.

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