Friday 20 November 2015

Why do farmers and crofters bother - incomes down again in 2014 /15

"We'll be redundant next!"
Each year the Department of Environment, Food and Rural Affairs looks at a sample of farm businesses with a turn over greater than £25,000 to see what has  happened in the last year. The results were published at the end of October and raises the question, " why do farmers carry on, when their income could be significantly higher if they didn't bother?".

In most cases  most types of farm  business made a loss before the payment of SFP ( single farm payment or subsidy). They didn't make enough to pay themselves or their family work force. After the SFP , payments for conservation projects and diversification which includes holiday lets, horse livery and wind turbines a loss was turned into a small profit but still not enough for a "living wage" and re-investment. You will not read this in the Daily Mail but there are farmers who only get by because of working family tax credits.

Farmers have, historically, been capital rich but cash poor and the present situation puts English and Welsh  food production in a very precarious position It must be very tempting to liquidate the capital then give in, give up and go away, turn the farm over to housing, industrial development or a banker looking for a safe haven for his bonus because he doesn't trust the banks.

Crofters generally don't have this problem being both capital poor and cash poor, lambs have always sold for less than the cost of production but it's easier than buying and maintaining a ride on mower.

No comments: