Actual accounts covering 100,000 hectares of farm land show a net farm income of just £41 per hectare for the year 1999/2000, a fall of £16 from the previous year, analysis by the Food & Agriculture group at Deloitte & Touche has uncovered.
And it appears the outlook for the rural economy will not improve. The accountancy firm predicts this year’s average profits will become heavy losses next year with net farm income dropping from £41/ha profit to a £22/ha.
Mark Hill, partner responsible for Deloittes’ Food & Agriculture group, said: ‘From the peak we recorded in 1995/96 average net farm income has plummeted by 90%.
‘This means an average 200 hectare family farm, which five years ago earned £80,000, must now survive on little more than £8,000.’
Hill, however, compliments farmers for applying their skills and resources to non-farming areas and making cutbacks to offset the growing financial pressures. But, he warned against believing expansion was the way forward.
‘Many of the poorest performing farms in this year’s survey are the largest,’ said Hill. ‘Often they have expanded through expensive options such as farm business tenancies. Our forecasts show that there will be minimal extra returns from taking on more acres at current rent levels.’
Deloittes’ annual farming survey is in its 11th year and bases its statistics on real financial information drawn from 250,000 acres of farmland, mostly in England.
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