Farming output shows a strong increase

However, some sectors of farming performed strongly last year, at least according to newly published Government statistics this week.

The latest Defra farm income figures show the total value of UK farm output has increased by 15 per cent to £23.7bn in 2011. Farming’s contribution to the wider British economy also increased 25 per cent year-on-year in gross value added (GVA) terms to £8.8bn.

The figures represent the strongest performance by the farming industry since the mid-90s. A 31 per cent increase in the bottom line for UK agriculture was seen nationally, as the total income from farming increased by £1.4bn to £5.7bn.

After adjusting for inflation, total income from farming is estimated to have increased by £1.1bn.

However, increases in overheads will naturally offset much of the increase in profitability.

The National Farmers’ Union chief economist, Phil Bicknell, said: “The positive headline performance by the industry is undoubtedly good news and a marked change to the decade-long lows we witnessed before 2008.

“Profitability underpins industry confidence and that generates investment in the agri-food supply chain, which in turn boosts the British economy by creating jobs and economic growth.

“However, all farmers will have noted dramatic increases in their cost base in recent times. The 2011 figures show a 10 per cent overall increase in farm costs year on year.

“Farming’s costs are some 53 per cent higher than they were just five years ago and continued rises in inputs will squeeze sector profitability.

“Defra figures later this year will give a more detailed insight on performance by specific farming sectors.”