Farm incomes in Scotland fell in the latest year of reporting 2023 – 2024.

Farm profits, after costs, fell for all farm types. A fall of  51%, its lowest level since 2019-20.

The figures are published in ‘Scottish farm business income: annual estimates 2023-2024’.

The report suggests the reasons for the fall from the previous year’s record highs as:

• Fall in price for agriculture output
• Fall in agriculture output – related to adverse weather conditions
• Input costs not falling at the same pace as output prices

Cereal Farm Income : fell by 63%

Dairy Farm Income: fell by 56%

Lowland cattle and sheep farm income : fell by 87%

Fewer farms made any profit without including support payments in 2023-24. For LFA (less favoured area) sheep farms, no farms in the survey made a profit without support payments, down from 8% of farms in the previous year.

The report is based on a survey of around 400 commercial farms (whose standard output exceeds around £20,000). 

The average farm made around £6,200 from diversified activities, for example by renting out buildings or generating electricity. This is a 23% increase from the previous year’s figure of £5,100.

NFU Scotland has called on  the UK Government to immediately pause proposed changes to inheritance tax (IHT) for farmers until the newly launched review into farm profitability is complete.

NFU Scotland President Andrew Connon said:

“You cannot hold a meaningful review into farm profitability while simultaneously implementing tax policies that reduce it.

“We are calling for a clear and time-limited pause on all changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) until the review has concluded and its recommendations have been properly considered.”

Also highlighted by NFUS was the ongoing impact of other UK Government Budget measures – such as increased National Insurance costs, reclassification of double cab pick-ups and the Carbon Border Adjustment Mechanism, that are already damaging day-to-day profitability across the sector.

Fiona Grahame