Thursday, October 14, 1999 Published at 13:13 GMT 14:13 UK
Farming profits halved
By BBC Environment Correspondent Robert Pigott
Farmers' profits were more than halved last year, according to an annual audit.
They are now the lowest since the accountancy firm, Deloitte & Touche, started recording farms' accounts 10 years ago.
An average family farm of 300 hectares would have seen profits fall from £37,000 a year to £17,000.
George Atkinson's 1,200 acre farm in East Meon, Hampshire, made a loss last year for the first time in the 90 years it has been in his family.
"If it was a factory, and effectively we are a factory, you would shut it down," said Mr Atkinson. "But of course you can't mothball the countryside".
Sugar beet and potatoes were about the only crops to make increased profits, with potatoes earning farmers £178 a hectare and beet £60.
Sheep prices would now be being affected by lambs held back in 1998, the report added.
Dairy farmers had the most difficult time, with profits of only £15 a hectare, again because the price of milk was so low.
And the end to the calf-processing scheme - a government scheme which culled surplus calves to keep prices up - would "only aggravate this sector's problems".
The report's authors suggest farmers should work more with each other, to negotiate the highest possible prices for their produce.
And it emphasised the need of some farms to merge with neighbouring businesses, to gain economies of scale.
It warned that low incomes are taking a severe psychological toll on farmers, making them feel undervalued and robbing them of their self-esteem.
The President of the Adam Smith Institute, Madsen Pirie, said the Atkinsons' farm reminded him of the loss-making textile factories of half a century ago.
"We have utterly transformed British industry", he says, "but we didn't allow farming to exploit market opportunities, or to move their products to where the demand is.
"If that means high quality, with high added-value, instead of mass-produced cheap food, then that is the way they would have gone."
George Atkinson already produces higher-quality meat for a premium price, but he believes demand for it is finite.
"The consumer wants the cheapest food, I am afraid," he says.
"Even if farmers do go to the quality end of the market and produce for the premium prices, the majority of housewives will still want the cheapest food they can pick out of their basket, and much of that will come from abroad."