Defra has recently published its Farm Business Income (FBI) figures for 2021-22. The full details can be found here. The FBI statistics given an overall picture of the financial health of farming in England by farming type and these are summarised below. Overall farming had a good year with the exception of the pig sector whose woes have been widely reported.
The uplands of England are detailed in the report as ‘Livestock Grazing (LFA)’, [LFA = Less Favoured Areas], I will use these figures as a proxy for what happened on Dartmoor in 2021-22. The data represent the average figures for upland farms in England but nevertheless are useful in providing trends and comparisons to previous years. The Defra commentary on the Grazing Livestock (LFA) figures is as follows.
So, in summary, upland farming in England had its best year financially since 2011-12 and this was largely driven by strong sales particularly from sheep. The figures did somewhat surprise me as input costs (fertilisers and fuel costs for example) had already begun to rise by late 2021 as a result of global geopolitical insecurities. Additionally, the concerns of Brexit on sheep sales to Europe appear not to have impacted on upland farm finances. Nevertheless, the full impacts of the war in Ukraine will not be fully felt until the 2022-23 figures are published.
It should also be noted that despite the unprecedentedly strong sheep sales and prices the average English upland farm only made a profit of £200 from its agricultural activity. FBI for upland farms rose by almost a third to an average of £42,900 with almost of this coming from public subsidies, environmental grants and diversified income. Without these income streams the average upland farm would have made a profit of just £4100. The FBI data for Grazing Livestock LFA farms since 2012 is summarised in the table below and is depicted in the two graphs below the table.
|Diversification||Basic Payment Scheme |
|Farm Business Income|
|Aes & BPS||FBI- Aes & BPS|
What is evident from the FBI graph is that upland farm income is very volatile – the 2021-22 figures are almost 3 times as high as the 2013-14 ones. It is also worth noting that there has been a steady and significant growth in upland FBI over the past three years.
However, in my view, the strong 2021-22 figures mask the underlying financial fragility of upland farming (including Dartmoor). The impact of the war in Ukraine on Dartmoor hill-farming is something I have written about before – see here and I fear that the financial impact of this will not be felt until the 2022-23 financial year. In addition the drought in the summer this year has led a shortage of fodder which will impact many detrimentally over the coming winter months. It is also proving difficult to forecast whether sheep prices will remain high, partly due to global uncertainties but also the impact of rising costs and the pressure this puts on household budgets.
Finally, there is the uncertainty created by the on-going changes in UK domestic agricultural policy. The Government has recently re-stated that it is not considering a change to the Agricultural Transition Plan, which means that the Basic Payment Scheme (BPS) subsidies will be completely phased out by 2027 (with a 50% reduction by 2024). Additionally, there is still a lack of clarity on what the Environmental Land Management Scheme (ELMS) will look like and what the payment levels will be. This is particularly true for upland areas and for common land. ELMS will replace existing agri-environmental grants schemes such as Higher Level Stewardship in 2024. Based on the 2021-22 FBI figures BPS and agri-environmental grant schemes accounted for 90.4% of the average upland farm’s FBI in England. If the BPS and environmental grant payments are excluded from the FBI the average upland farmer in England would only have £4100 to live on for a year. Applying the same logic to the 2018-19 figures the average upland farmer would have made a loss of £18,800……..