LAST year's windfall profits of up to 400% more for arable farmers are
unlikely to be repeated this year and more careful planning is needed
for future survival, according to a new report from the Agricultural
Development and Advisory Service (ADAS).
This should involve reducing costs of production, aiming for more
environmentally friendly farming and diversifying into non-food crops,
said Dr Julia Walsh, ADAS director general, at an industry seminar in
London yesterday.
Institutional support levels had taken on a high profile on the
political agenda. This pointed towards the need to move away from
dependence on this source of income, to form closer links with the food
industry and to develop more advanced systems of business planning.
Major winners last year were top potato producers with up to 400%
increases in profits, according to the report ''The Growing Business
1995''. For a typical 200 hectare mixed arable farm this could have
boosted income by #70,000. Profits for cereal growers grew by a more
modest 12%.
But neither sector could expect this to continue. Bill Hall, head of
the ADAS business consultancy, warned that potato producers were facing
tough times ahead. ''Next season's profits could fall just as
dramatically as they rose in 1994. In future only those who target a
chosen market and meet that market's requirements will achieve good
margins.''
Jim Orson, head of cereal development, delivered a similar warning for
this sector. The fall in cereals prices over the years had been offset
by cost reductions and yield gains and even in the coming year the
expected drop of #10-#15 per tonne would be largely offset by increased
area payments.
But he added: ''Market pressures will require even further cost
reductions and yield increases to be made. To remain competitive,
farmers will need to be able to grow feed quality cereals at or below
#80 per tonne.''
The opportunities for diversification into non-food crops looked
brighter, acording to Melvyn Askew, head of alternative crops and
biotechnology. ''The potential for plant-derived oils is enormous. The
UK alone uses over 750,000 tonnes of lubricating oils and greases per
annum.
''Currently most of these are processed from crude mineral oil but
many could be substituted by oils and greases of plant origin.
Industrial use of vegetable oils in the EU is already in excess of 1.7
million tonnes a year.''
The report also concludes that the prospect for any increase in the
market for organic produce continues to look poor.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article