At the market: Farm incomes drop by 90pc

I know figures are like many politicians who seem to be able to promote any argument that suits them at the time and yet three months later take a diametrically different view; but these latest figures are from Deloitte & Touche, a firm of accountants who have carried out a survey of their clients' farming operations covering 250,000 acres.

Over the past five years, the average income on a 500 acre family farm has dropped from £80,000 to £8,000; and worse still they are predicting that a further 26pc fall will occur this year taking the same farm £4,000 into the red.

It is frightening to look at the bleak facts of cereal production where most authorities believe that it costs £70-£80 to produce a tonne of wheat and yet today's market is running at £58-£60 per tonne.

As Mr McCawber pointed out, the outcome of trading such as this can only be misery.

Not only will many farmers be forced to quit the land - and I am one of those that believe that we may be watching the last generation of upland farmers - but the knock-on effect on agricultural support firms will be devastating.

Deloitte & Touche report that somewhere in the region of 22,000 jobs have been lost in the support industries for agriculture such as farm labour, vets and machinery dealers.

It is a sad reflection of the times that I was invited to a lunchtime discussion over a sandwich by a firm involved in liquidation, and listened to the heart breaking tale of a small specialist sprayer manufacturer who sold 20-30 machines two years ago, dropping to ten last year and only four this year.

Strangely enough, this latest report shows that it is the larger, well equipped farm that is suffering most where they have not been able to re-adjust to the collapse of the cereal market. Successive governments have presided over the slide in agricultural fortunes with a lack of understanding and little conviction to help.

However, New Labour has been the pits and really must address the question of Britain maintaining its food production capacity.

It might be temporarily cheap but that is short-sighted. When the economy stutters and the pound drops, we may no longer be able to afford Botswanan beef or Dutch pork.

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My next piece this week illustrates the different approach taken by the British and French Governments to cries for help from their beleaguered farmers.

I have a new Scagglethorpe correspondent in John Brown and he has sent me a most interesting article on French subsidies which I think bide listing:

Non-repayable grant up to £14,000 towards any capital project

Subsidised borrowing up to £72,000 at 2pc interest

Subsidised advance loan for farm improvements up to ££94,000 at 2pc

£5,000 mobility grant for any farmer moving into one of the French regions

And to make the gulf even wider, the price of land and buildings is around 25pc compared to the UK and farm prices about double.

The point I am making is that the French Government are proffering real tangible help to their farmers whereas in Britain we get largely ignored.

Last week, the latest aid concoction came out of MAFF which exemplifies what I mean.

The Agriculture Minister launched a new £20m Farm Business Advice Service for English farmers and growers.

The scheme is designed to help farmers develop better financial management, record keeping and marketing; but in truth our world is full of people who can do that whereas we are desperate for tangible help such as the French have got. Often, I find that it is the cost of borrowings which is the final straw and the opportunity to take a 2pc loan could save many businesses.

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I have been ranting on for months now about the desperate need to introduce an independent appeals mechanism into all our state run schemes.

Last week, I mentioned the Meat & Hygiene Service who cannot see "the beam in their own eye"; and now it is the turn of those running the IACS system to consider their position.

In England, we are falling behind our devolved neighbours as the Welsh and now the Scots have introduced an independent appeals procedure which will be up and running within a month.

All the English civil servants will say is that they are sending out a consultation paper!

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My last moan this week is also directed at the Government who seem incapable of heeding the advice given to them about red tape.

The Pooley Report last year condemned almost in its entirety the over-regulation in the meat industry, and the McClean task force this summer also made unanimous recommendations which have not been implemented.

The latest is an independent report from an inquiry team headed by a former agriculture minister which says that the proposals to impose full veterinary coverage from April next year will have disastrous consequences for the meat and livestock sectors.

The Government want to put vets and MHS officials into abattoirs, whatever their size, on a permanent basis and the costs will be passed on at an hourly rate to the abattoir operator.

This can do no other than discriminate against the smaller slaughter house which simply cannot stand any more expense; and there have been repeated pleas that all charges be put on a headage basis so that some equity is restored.

If they don't do something I fear we will see yet another raft of medium to small sized operators go out of business, and these are the very people that are vital to our industry.

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Tuesday's market saw 211 cattle face a trade which rewarded quality but penalised the poorly finished cattle.

We had 74 bulls with the Continentals averaging around 96p/kilo up to a top of 113p shared by Alice Thompson and Roland Mason. Steers, and especially the heavier, better fleshed end were a right enough trade but when I say that the variation was from 71p to 107p you will appreciate the very wide price spectrum.

At the top end it was a heavyweight steer from Brian Gray which made 107p; and amongst the heifers, Jeremy Waind stormed ahead with 135p/kilo followed by George Marwood at 131p/kilo.

There is nothing wrong with the cattle trade at all provided the cattle themselves are finished.

We had 825 sheep and trade was pretty fair, averaging 80p/kilo overall. The top price of 90p/kilo went to Clive Southwell.

Just over 200 pigs were in town for the Monday and Tuesday markets and the averages were interestingly again hovering at 80p/kilo.

The top price in this section was also 90p achieved by H W Ward & Sons for a pen of lightweight gilts.

I keep repeating that the live market is buoyant at the minute and deserves your support.

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I had dinner with my Ryton correspondent this week from whence emerged two conundrums for you to answer.

What is Lady Macbeth's Christian name?

The clue to a crossword reads as follows: "GSEG!?" - the answer has to be in two words of nine and four letters respectively.