Farm incomes halved over four-year period

Isles producers are suffering more than their mainland counterparts because of added costs, a farming leader has warned.

Local NFU chairman Jim Nicolson has spoken after the Scottish government admitted farm incomes are expected to have halved in just four years from 2010 onwards.

That is despite more than £2 billion of agricultural support being offered by the Scottish government and Europe over the same period.

Producers have also faced ongoing problems with the late subsidy payments over the winter.

Key among considerations for local producers has been a drop in the returns from lamb, beef and dairy produce.

Mr Nicolson has cited a tight grip being held on prices by supermarkets, as well as the “horse-gate” scandal of 2013 which was sparked after beef products were found to contain traces of horse DNA.

But he said higher costs associated with bringing feed to the isles and exporting produce – as well as the implications of last year’s prolonged spell of bad weather – have exacerbated problems locally.

“There is definitely a decline in what lamb, beef or milk can make – maybe to a certain extent because supermarkets have considerable control over prices,” Mr Nicolson said.

“In real terms, there has certainly been a reduction in the returns for the produce that farms and crofts can make.”

He added that he was not surprised to hear news of the income reduction.

“Certainly, last year there was a significant drop in lamb prices. Over the five-year period there was certainly a drop. And we did have beef prices increasing a bit after that horse-gate scandal a few years ago, but appears to have dropped back since then.

“Locally we have the higher costs for bringing in concentrate feed and maybe hay and straw. Obviously the costs of exporting lamb and cattle out of Shetland are additional costs we have that other parts of the country don’t have.

“I suppose, especially last year, the impact of the really poor weather throughout the year resulted in animals not in the best condition.”

Rural affairs minister Richard Lochhead voiced disappointment over the drop in income.

Following the publication of the latest figures from Scotland’s chief statistician, Mr Lochhead said it was disappointing that farm incomes continued to drop.

He said: “Scotland’s farmers are the backbone of one of the country’s most successful sectors – food and drink – and yet they don’t appear to be reaping the rewards to the same degree as the rest of the supply chain, and that needs to change.

“If billions of pounds of farm support through the Common Agricultural Policy is failing to halt such a decline it is clear that Europe needs to place a greater focus on dysfunctional supply chains and markets.

“Today’s figures are based on the 2014 crop year and I know recent years have been extremely tough for the farming community.

“Our hard-working farmers are not getting a fair share for all the work they’re putting in, which is sadly reflected in these figures.

“While the food and drink industry is booming, farmers are struggling. Low prices mean times are hard and that’s not right. Farmers should be getting a good price that reflects the quality of their produce.

“After all, the success of Scotland’s food and drink industry starts on our farms, where the raw ingredients are grown.”

Mr Lochhead said ministers would continue to work with the industry to improve profitability.

“That’s why, for instance, the Scottish government recently convened a dairy summit with all parts of the supply chain present where discussion took place on a number of practical steps that can be taken to ensure our hard-pressed dairy farmers receive a fair return for their efforts.”