Defra has released an update to the 2009 Aggregate Agricultural Accounts, including a revised estimate of Total Income From Farming, a figure regularly used as an indicator of the performance of the whole agricultural sector over the calendar year.
TIFF for 2009 was adjusted downwards to £3.6bn – down 19% on 2008 – but still a relative high on the preceding decade, when TIFF averaged £2.2bn. The Defra release also provided an indication of the TIFF for this year, with an initial suggestion that it will fall by 13 %, although the department’s analysts highlight the broad margin of uncertainty at this stage.
NFU senior economics adviser Philip Bicknell said: “Given the unfavourable SPS exchange rate compared to 2009, we already knew that the value of SPS payments in 2010 would be lower, and that Defra’s Aggregate Agricultural Accounts would reflect this.
“On the output side, we’ve seen big increases in cereal prices through the second half of 2010 and lamb prices have continued to grow year-on-year. Of course, not all sectors have seen increasing output while higher cereal prices will also be reflected in higher feed costs. Added to higher fertiliser and energy prices, many farm businesses will see their bottom line impacted by higher input prices this year.
“As in years gone by, I’d anticipate revisions to Defra’s initial estimate, particularly given that the second half of 2010 has again been characterised by market volatility. What is certain is that the SPS payments will again form a significant proportion of TIFF in 2010.
“At a time when the European Commission’s CAP Communication is generating debate about post-2013 agricultural support, TIFF data again demonstrates the real challenge of generating profitable returns from food production without appropriate policy measures in the short-to-medium term.”
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