New government figures show farming is performing strongly despite the on-going struggles of the wider economy. The latest Defra farm income figures show the total value of UK farm output increased by 15 per cent to £23.7billion in 2011. Farming’s contribution to the wider British economy also increased 25 per cent year-on-year to £8.8billion.

These rises mean the farming industry in the UK is at its strongest point since the mid-90s. UK agriculutre’s profitability increased by around a 31 per cent, according to the figures, as the total income from farming (TIFF) increased by £1.4billion to £5.7billion. In real terms, after adjusting for inflation, total income from farming is estimated to have increased by £1.1billion.

The NFU has been quick to welcome the news, which comes at a worrying time for farmers in all sectors, with concerns ranging from rising fuel and feed costs to the potential impacts of drought. NFU chief economist Phil Bicknell commented, “The positive headline performance by the industry is undoubtedly good news and a marked change to the decade-long lows we witnessed before 2008. Profitability underpins industry confidence and that generates investment in the agri-food supply chain, which in turn boosts the British economy by creating jobs and economic growth.

However, he went on to say that concerns over spiralling input costs remain concerning, despite the increase in profitability 2011 brought. Bicknell said, “All farmers will have noted dramatic increases in their cost base in recent times. The 2011 figures show a 10 per cent overall increase in farm costs year on year. For key inputs, the cost rises have been significantly higher. Fertiliser and animal feed prices increased by 26 and 21 per cent last year for example, and NFU members flagged rising input costs as their key concern when asked about business prospects.

“Farming’s costs are some 53 per cent higher than they were just five years ago and continued rises in inputs will squeeze sector profitability. The industry already faces a challenge to maintain the improvements in output, with recent price cuts by milk processors and the post-harvest cereal prices on offer both putting pressure on future growth potential.”

Defra figures released later in the year will provide more detailed insight into farming’s performance last year, including performance by sector. Nevertheless, despite fears over input costs, the sector, which farming groups and Defra ministers have claim can lead the way towards economic recovery and play a part in creating a ‘green economy,’ is demonstrably thriving.

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