Rural Life: Farmers' incomes slump by half

Government figures published yesterday point to a nearly 50 per cent drop in farm incomes last year. A fall in the value of produce caused by the strong pound and cuts in compensation to farmers hit by the BSE crisis are behind the drop, according to the Ministry of Agriculture report.

It came as farmers said they are suffering the worst agricultural crisis in living memory. The figures confirm estimates released last month, showing that income to farmers and their spouses - the figure used by farmers as a guide to conditions on the farm - fell by 46 per cent in real terms.

A broader definition, which takes in income to farmers, their partners, directors and family workers, shows a 37 per cent decline. The report said the fall was caused by the strength of the pound which led to an overall 11 per cent drop in the value of all major agricultural products.

Beef farmers also suffered from pounds 122m cuts in compensation for cattle killed in the BSE cull and payments for calves taken out of production.

Overall, farming income was estimated at pounds 2.2bn last year, compared with pounds 4.1bn in 1996, pounds 4.3bn in 1995 and pounds 3.4bn in 1994. Worst hit were lowland cattle and sheep farms, which experienced a 65 per cent drop in incomes. But all other sectors were also affected, including dairy farms down 36 per cent, cereals, pig and poultry sectors down 44 per cent.

The figures do not take account of the pounds 85m aid package announced by Agriculture Minister Jack Cunningham last month. Commenting on today's figures, Mr Cunningham said the drop came after substantial increases in incomes in recent years and reflected lower prices paid for many agricultural commodities.