Photograph Courtesy of The Rural History Centre, University of Reading
Whether British agriculture has declined or is indeed 'in recline' is open to debate. It is generally accepted that at present British agriculture is facing serious difficulties. .
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|Total income from farming (TIFF) fell steeply from its peak in 1995.|
|In 2000, farm incomes were at their lowest level since entering the Common Agricultural Policy.|
The very steep decline in farm incomes and the financial pressure on farms at this time was the result of a combination of events. Farm incomes in the UK are now as low (in real terms) as at any time in the last thirty years . Even though farm incomes have recovered recently (see graph below) they are still lower than in 1995 (after doubling between 1990 and 1995).
Source data: Defra (2011)
The steep fall in income reflected a combination of adverse factors:
|An exchange rate which is high by historical standards|
|Weak world markets in a range of commodities|
|The effects of the BSE crisis, foot & mouth disease and other food scares|
Examples of farm diversification, tourism & leisure and Ostrich farming
The steep fall in income affected all types of farms and all regions in the UK, although to different degrees. For some farmers, the impact of the downturn was cushioned by other sources of diversified income. At least 25% of full-time farmers in England have diversified incomes and for these farmers this diversified income is worth slightly more, on average, than the income earned from farming. But diversification is far easier in some areas than in others; in particular, in more accessible parts of the countryside or in areas with leisure potential.
|Although farm income has risen recently (2007-2010), largely due to a strengthening in the world commodity prices, forecasts for the industry’s future prospects are uncertain. The factors which have driven the recent turbulence in farm incomes (in particular the exchange rate) are themselves highly uncertain, but also because unexpected events (such as weather conditions or disease outbreaks) may push incomes sharply away from underlying trends (aspects associated with climatic change in the long-term add to this uncertainty).|
|Recovery from the present low levels of income is likely to take time and profitability prospects in the short-term are not promising as the cost of inputs such as fertilisers are also increasing.|
CLICK HERE for details of the current state of Agriculture and Incomes.
Pause for thought........Compile your own thoughts on the likely state of UK agriculture in 10 years time. List 3 factors you have considered in reaching your choice.
Agricultural Holdings in 2005
Breakdown of Farm sizes for 15 EU countries
Number of Holdings* (000's)
|Less than 5 ha||5 - 50 ha||More than 50 ha||Average Farm size (ha)|
* Holdings with an economic size of at least 1 European Size Unit (ESU); Source: Farm Structure Survey 2005, Eurostat.
The current value of agriculture
Key changes in agriculture between 1981 (follow links)
Aggregate Agricultural Account
In the longer term, pressures on the agriculture industry will come from increased competition in agricultural markets, as a result of reform to the Common Agricultural Policy (CAP), the World Trade Organization (WTO) negotiations on liberalization of agricultural trade, and the recent enlargement of the European Union. Agriculture will also need to respond to changing market conditions, both on the supply side (in relation to new technological developments and business methods) and on the demand side, where consumers are now more concerned about different dimensions of the quality of their food – in particular its nutritional characteristics, its safety and traceability, and that it is produced in ways which care for the environment and animal welfare
Pause for thought....... What are the consequences of a gradual fall in land prices? Who will buy the land that comes onto the market or will the UK experience land abandonment as witnessed in some other parts of the EU?
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