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Publication - Statistics Publication

Total income from farming: estimates for Scotland 2014-2016

Published: 31 Jan 2017
Part of:
Farming and rural
ISBN:
9781786527707

Total income from farming (TIFF) is an estimate of the net income from farming in Scotland in the period 2014 to 2016.

34 page PDF

1.5MB

34 page PDF

1.5MB

Contents
Total income from farming: estimates for Scotland 2014-2016
3. Overview of TIFF 2015 and 2016

34 page PDF

1.5MB

3. Overview of TIFF 2015 and 2016

Chart 1 gives a summary of the make-up of outputs and costs within TIFF. In both years gross outputs were worth just under £2.9 billion, total costs about £2.65 billion, with subsidies at about £440 million in 2015 rising to £490 million in 2016. The differences between income (outputs plus subsidies) and costs give the overall estimates of TIFF.

With more data for 2015 now available, last year's initial estimate for TIFF has been revised slightly to £653 million. The 2015 estimate is down £122 million on 2014; that's a fall of 16 per cent, or 17 per cent after accounting for inflation.

The initial estimate for 2016 is £749 million, an increase of £96 million on 2015, 15 per cent, or 14 per cent in real terms.

The data show that the profitability of the agricultural sector is heavily, though not entirely, dependent upon subsidies.

In 2016, the original amount of pillar 1 EU support increased two per cent (€10 million), but the weakening of the pound in the second half of the year resulted in an eleven per cent increase in overall support payments. The weak pound also meant that, after prices has initially been down on 2015, they recovered in the second half of the year, resulting in the overall value of farm output remaining fairly steady. These two elements contributed to the estimated increase in TIFF.

Tables showing the detailed list of components of TIFF are provided in section 12, with data from 2007 to 2016. Chart 1 illustrates the components that make up the calculation of TIFF, with TIFF being the difference between total outputs (plus subsidies) and total costs.

Chart 1: Make-up of Agricultural Accounts, 2015 and 2016 source: Table 1

Chart 1: Make-up of Agricultural Accounts, 2015 and 2016 source: Table 1

3.1 Long term trends

The long term trend, illustrated in Chart 2, inevitably includes some jumps in individual elements where a particular methodology has changed and it has not been possible or preferable to recalculate the time-series back to 1973. However these individual discontinuities are considered small enough relative to the overall pattern of changes in TIFF.

In real terms (once inflation has been accounted for), high inflation in the mid-1970s resulted in a large fall in TIFF. TIFF then almost trebled between 1990 and 1995 before falling from 1995 to 1998 primarily due to a strong pound, weak world commodity prices and the impact of BSE. The outbreak of Foot and Mouth Disease in 2001 appears to have had little impact on TIFF. The real terms value of TIFF then almost trebled between 1998 and 2013, showing consistent steady growth, though fluctuating every few years.

Chart 2: Trends in Total Income from Farming (TIFF), 1973 to 2016 source: Table 4

Chart 2: Trends in Total Income from Farming (TIFF), 1973 to 2016 source: Table 4

3.2 High-level components of TIFF

Total outputs from farms in Scotland fell from £3.03 billion in 2014 to £2.88 billion in 2015. Once inflation is taken into account this was a decrease of six per cent. The first estimates for 2016 suggest a fall of just £14 million to £2.87 billion, or a real terms decrease of one per cent.

Total costs for farms in Scotland fell from £2.75 billion in 2014 to £2.68 billion in 2015. Once inflation is taken into account this was a fall of four per cent. The first estimates for 2016 suggest a fall of £63 million to £2.61 billion, or a real terms fall of three per cent.

Chart 3 shows that outputs and costs have been broadly similar across the last ten years, with outputs slightly higher than costs in nine of the last ten years, and more clearly so since 2013.

Subsidies and other payments are mainly affected by changes in the euro exchange-rate, though in recent years there were significant reductions in the euro payment amount. This meant that in 2015 total payments (excluding coupled support) fell by £46 million to £444 million, an 11 per cent decrease after accounting for inflation. However, in 2016, with the weakening of the pound in the latter part of the year, 2016 payments increased by £47 million to £491 million, a ten per cent increase after accounting for inflation.

Chart 3: Trends in outputs, costs and subsidies over the period, in real terms source: Table 3

Chart 3: Trends in outputs, costs and subsidies, in real terms

 


Contact

Email: Neil White