TOTAL income from farming in 2001 in the UK is estimated to be £1.7 billion which is 13pc (11pc in real terms) higher than its 2000 level.

TIFF represents business profits plus income to farmers, partners and directors and those with an entrepreneurial interest in the business.

This overall increase masks variation across sectors as they faced differing circumstances in 2001. In real terms, TIFF is forecast to be 72pc below its peak in 1995 (after doubling between 1990 and 1995).

Compensation paid for livestock culled as part of the measures taken to eradicate foot and mouth disease, which totalled £1.2 billion, is not included in income.

Cash flow from farming rose in real terms by £1.2 billion or 46pc, mainly because it includes the compensation for the livestock cull (however it does not take into account the value of losses of livestock).

The value of output (including subsidies directly related to products) was slightly higher, up 0.7pc. The volume was 6pc lower, with reduced production of cereals and livestock due to wet weather and foot and mouth disease respectively.

The prices received by farmers were

7.1pc higher due mainly to price rises for milk and crops (in particular for wheat, oilseed rape, sugar beet, potatoes and vegetables). Intermediate consumption cost farmers 2.6pc or £221m more. They used less fertiliser and pesticides but more seeds (they had to re-sow in spring due to weather conditions). Although they used 5.7pc less fertiliser on a smaller planted area, the price rose by 10pc resulting in an increase in expenditure of 4.2pc. Pesticides consumption fell by 6.5pc.

Livestock farmers also faced increased costs. The price of feeding stuffs was 8pc higher because of higher cereals prices. General costs also rose as they coped with movement restrictions due to FMD.

Updated: 10:05 Thursday, February 07, 2002