Farming in the Uplands - ARCHIVE: Defra

Environment, Food and Rural Affairs Committee: Evidence Ev 75
37. Grazing livestock farming is currently almost always economically unviable without public
payments. Figure 6, below, shows the breakdown of income from business activities and subsidy for both
lowland and upland grazing farms. Lowland grazing farms share the same diYcult economic circumstances,
although typically make slightly less of a loss on their agricultural activities and have greater scope for
diversification income.
Figure 6
Breakdown of income sources for lowland and upland grazing farms in England for the latest three years.
Length of columns indicates the contribution from each source). Farm Business Income shows the gross
income from each of these sources, including the contribution of agriculture, which has a negative net margin
or income
£ per farm
30000
20000
10000
0
-10000
-20000
2006/07 2007/08 2008/09 2006/07 2007/08 2008/09
Lowland grazing livestock LFA grazing livestock
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Single Payment Scheme
Agri-env acvies (a)
HFA payments
Diversificaon
Ag net margin
Farm Business Income
Source: Farm Business Survey
38. Without support from the Single Payment Scheme and the former Hill Farm Allowance), many
upland farmers would, at current (or recent) input and output prices be making a loss on average on their
farm business activities.
39. This reliance on public support is demonstrated by an analysis of Farm Business Survey data for
2008–09, which shows that upland farmers received around £163 million from the Single Payment Scheme,
£54 million from agri-environment payments and £19 1 2 million from the Hill Farm Allowance scheme (now
replaced by Uplands ELS funding of £25 million, depending upon uptake). When adjusted for business size
the contribution to farm business income from the Single Payment is around 15% higher on upland farms
than those in the lowland. The contribution from agri-environment schemes in addition to the Hill Farm
Allowance is almost three times as great.
40. Diversification opportunities are often more limited in the uplands due to the sparse population and,
for a number of areas, longer distances to large population centres. Farm Business Survey data highlights
that LFA farms have the lowest proportion of diversified activity (41% of LFA grazing livestock farms
undertaking some form of diversification in 2007–08, compared to 51% across all farms) and that the
contribution of these diversified activities to farm business income was 21%. 15 The Uplands Farm Practice
Survey found that more than half (56%) of upland farms had a diversified activity or other income
contributing to household income. For almost half of upland farmers this was from an oV-farm
diversification enterprise or income whilst a quarter of upland farms had an on-farm diversified enterprise
such as a farm shop or Bed & Breakfast. The survey highlighted that over half of upland farmers with no
current diversified activity felt there was either no scope or they had no plans to diversify, and a further
significant group had never thought about diversifying (28% of those with no current on-farm enterprise
and 43% of those with no current oV farm enterprise or income). There is, however, a greater tendency in
the uplands towards supplementing farm income with oV farm employment—whether on the part of the
farmer or spouse—reducing the time available for further on-farm diversification.
15 Farming in the English Uplands, Defra Agricultural Change and Environment Observatory