Analysis by Clydesdale Bank reveals that the agriculture sector in Scotland is showing signs of growth as farmers successfully navigate uncertainties linked to currency fluctuations and future subsidies.

The farming sector in Scotland saw a drop in Total Income From Farming (TIFF) from £775m in 2014 to £653m in 2015. However the sector showed great resilience in 2016 with initial estimates forecasting a rise to £749m.

Since the Brexit vote, there has been a 10 to 15 per cent devaluation in Sterling against the Euro and US Dollar. According to the Clydesdale Bank, even assuming flat global agricultural commodity prices, based on the weaker currency alone, 2017 also looks positive. With the level of subsidy to agriculture in Sterling worth 10 to 15 per cent more in the current year, and the price of almost all agricultural products 10 to 15 per cent higher than this time last year, there are genuine grounds for optimism in terms of TIFF for 2017.

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In addition, with a strengthening of Sterling unlikely in the next couple of years during the Brexil negotiations, this should provide a good level of support for agricultural prices in the UK, making exports more attractive.

Despite the positive signs, Clydesdale Bank predicts the longer term success or failure of agricultural businesses will undoubtedly be determined by continuing to drive efficiencies and make good, well-researched management decisions. Further, historically 60 to 70 per cent of TIFF has been generated from European-based subsidies, so farmers will need to remain as informed as possible in relation to ongoing business and strategy decisions.

To help future proof their operations, agricultural businesses are also seeking to create new income streams and make the most of the uncertain times by seizing unique opportunities for growth, which often require significant investment.

Brian Colquhon, Head of Commercial Banking and Agriculture, Clydesdale Bank, said: "Farmers have demonstrated genuine entrepreneurial spirit by investing to generate new income streams. We are fortunate to have the opportunity to work with many forward-thinking customers and it is incredibly important they know they have the support behind them when exploring these options."

Clydesdale Bank's own lending figures to its agricultural sector show a sharp rise last year with a 15 per cent increase in lending in 2016.

Mr Colquhoun went on: "Agricultural businesses throughout the UK have faced recent uncertainties and challenges head on, and are demonstrating incredible resilience. Agriculture is the foundation of many regional economies, and through our £6bn lending commitment to boost the growth of SMEs throughout the UK we will play our part in supporting the ambitions of the rural economy."