SCOTLAND’S FARMERS will not be surprised to hear that total income from their farming efforts took a dive during both 2014 and 2015, the first consecutive fall since the 1990s.

Figures from the Scottish Government’s chief statistician published this week show income fell by 9% in 2014 compared to the previous year, while initial estimates for 2015 suggest a further drop of 15%.

Agriculture was worth £777 million to the Scottish economy in 2014, down from £837 million in 2013, with the value of subsidies, potatoes and barley all seeing big falls.

Although not all the data is in, total income from farming for 2015 may have fallen back as far as £667 million, which, once inflation is taken into account, is the second lowest in the past decade.

Unsurprising for 2015, it looks like the dairy sector suffered from the largest drop in price, with the poultry-meat industry also falling back, now having lost half its value in two years. The main CAP subsidies were also down, though income from fruit increased considerably.

Rural affairs secretary Richard Lochhead said: “There can be no doubt that 2015 was a very difficult year for Scottish agriculture. In addition to the impact of extreme weather, global volatility has continued to take its toll on producers’ incomes - particularly in the dairy sector.

“These figures highlight the importance of EU funding to Scottish agriculture. The CAP is expected to inject more than £4.5 billion into the Scottish economy over this CAP period, and Scottish dairy producers benefitted from EU emergency aid last year.

“Scotland needs a fairer share of funding from a simpler and more streamlined CAP with food production at its core. But this must be addressed from within the EU, as it is clearly in the best interests of Scottish farming to stay in Europe.”

Subsidies, including coupled support, amounted to £510 million in 2014 and £490 million in 2015. The reduction in 2015 was due to CAP direct payments - basic payment scheme, greening and young farmer payments - being down 13% on single farm payment, due to both a less favourable exchange rate and a 6% reduction in the original euro payment.

Subsidies remain an important factor in the profitability of farming, accounting for 14% of gross income and 74% of total income from farming in 2015.

Also included in the figures are regional estimates for total farming income. On a per hectare basis, the highest level of income from farming is in South west Scotland. This is mainly due to income from milk, accounting for about 30-40% of the region’s output, and beef production.

The North west is the second highest, with beef and cereals being its strength. Highlands and Islands has the lowest income from farming, where agriculture is estimated to have made only a very small profit once support is included. Eastern Scotland has the most balanced distribution of output, with cereals, potatoes, horticulture, cattle, poultry and other income each producing more than 10% of the region’s output, with none of them above 20%.

For in-depth news and views on Scottish agriculture, see this Friday’s issue of The Scottish Farmer or visit www.thescottishfarmer.co.uk