First estimates from Eurostat, the statistical office of the European Union, show that agricultural income per worker increased by 6.7 per cent across the EU in 2011. The rising value of farm output across Europe contributed to this increased performance. 
Overall a 7.5 per cent increase in farm output was recorded in real terms, with stronger crop and livestock prices driving the growth in total output.
However, this data release also shows the challenges that farmers in the EU face with managing a rising cost base. Input costs across Europe grew by 9.7 per cent in 2011 on average with higher costs for feed (+16.8 per cent), fertilisers (+14.6 per cent) and energy (+11.8 per cent) driving the overall increase in farm costs.
The Eurostat data shows a 4 per cent increase in real agricultural income per worker for the UK compared to 2010, slightly below the EU27 average. This is in line with Defra’s recent initial indication of Total Income for Farming for 2011 that showed a small increase in farm incomes at the aggregate level. Over the longer term, UK farm income has outperformed the EU average according to Eurostat. The EU27 has shown an 18.3 per cent rise in real agricultural income per worker since 2005 whereas the UK has notched a 44.1 per cent increase over the same period.
The figures also show a breadth of farm performance across the EU. For example, Romania recorded a 44 per cent year on year increase in farm incomes whereas Belgium noted a 22.5 per cent fall. This variation is partly explained by the different characteristics of farm sectors in member states in terms of land area, production type and output marketed. Coupled with the volatility in commodity markets that have characterised on certain sectors, this can contribute to some significant year on year changes in farm income across member states.
Phil Bicknell, NFU chief economic advisor, said: “The Eurostat figures are another indication of how well agriculture has performed during the financial crisis in relation to other sectors of the economy. They also back up the NFU’s latest confidence survey where 48 per cent of farmers said they were confident about their future. It is critical that this confidence is maintained and that it triggers the increased investment needed by UK farmers if we are going to meet the future food production challenge.
“In particular, we must not ignore the short term challenges as the European figures on rising inputs highlights. UK data for inputs shows that costs have increased by 17 per cent since the start of 2010, whilst certain parts of the UK have struggled with drought and all sectors are still adapting to volatility in global agricultural markets.”
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