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Friday, July 24, 1998 Published at 15:47 GMT 16:47 UK

Farming profits collapse

Weather, the pound and BSE have combined to hit farming profits

UK farmers have suffered a collapse in profits since last summer, a report from the Institute of Chartered Accountants has said.

Tumbling profits have hit farmers in all regions. One of the worst affected areas was the south west, where the fall was almost 80%. Across England and Wales as a whole, profits fell on average by a half.

David Missen, a member of the Institute's Farming Group, said: "We are seeing every agricultural commodity at rock bottom across the country. Farmers have in the past been accused of crying wolf, but this time the crisis is genuine."

Triple whammy

Farming organisations said that farmers are suffering from a combination of three chief factors: the economy, the poor summer and the continuing effects of the beef export ban.

The world market price for grain and other agricultural produce has fallen in recent years. The strength of sterling has hit farmers hard, making their exports more expensive.

The European ban on exporting UK beef, introduced in response to the BSE - "mad cow disease" - crisis, is in its second year and continues to affect the farming industry.

[ image: The poor summer has taken its toll on cereal crops]
The poor summer has taken its toll on cereal crops

There has been more rain and less sunshine than average this summer, which has meant a poor harvest for cereals and oil seed crops.

Another knock-on effect of the weather on farmers is that the rainy summer has meant people's appetite for seasonal fruits and vegetables has dropped off this year.

"No one wants to eats lots of salads or go for picnics in the kind of weather we've been having," said a spokeswoman for the National Farmers Union (NFU).

Waiting for the sun

Farmers were hoping for a late bout of sunshine which could boost sales and crop-yields.

Weather experts said that the amount of rainfall for England and Wales had been 40% above average since start of April. In Scotland, it was 60% above average.

They were expecting drier and warmer weather in August - though could not promise more sun. "It's just the Great British weather, I'm afraid," said Andy Yeatman of the Met. Office.

Feeling down on the farm

"Usually different farming sectors would balance each other out," David Missen said. "But now everything is going badly."

The institute's report looked at farms in England and Wales only, but the Scottish NFU has said that farmers there are in exactly the same boat. This has led to extremely low morale within the industry.

"It would not surprise me if the same fall in profits in England and Wales is mirrored in Scotland. All sectors have been hit, and continue to be hit," said Polly McPherson, of NFU Scotland.

A survey by the organisation has said that almost 90% of farmers were pessimistic about the future, and would not encourage anyone else to enter farming.

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	Relevant Stories 12 Jun 98 \| UK EU vets delay lifting beef ban 10 Jun 98 \| UK Hope for British beef 27 May 98 \| UK Farmers campaign against 'rural crisis' 27 May 98 \| UK Farmers get down to grass roots

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