Scottish farmers under pressure as average income from farms hits 'dramatic' five-year low

Scottish farmers are under pressure as the average farm income fell dramatically last year by 51% to just £35,500 – the lowest level since 2019-20.

Particularly hard-hit are livestock producers, with lowland cattle and sheep farm incomes plummeting by 87%, with almost two thirds of these farms making a loss.

In addition, more than one third of cereal and milk producers recorded a loss last year.

The figures were published by the Scottish Government as part of annual estimates for average farm incomes for 2023/24.

On Monday, the National Farmers Union responded with “deep concern” to the figures.

The NFU said it highlights the “deepening financial pressures” facing Scottish farmers and urged the UK and Scottish governments to take action.

“This should be a wake up call to the UK Government. It must urgently reconsider proposals that could decimate generational family farms. These are not cash-rich businesses – they’re the backbone of food production and rural Scotland,” NFU Scotland president Andrew Connon said.

“It’s alarming but not surprising to see the financials of the cereals and milk sectors given the subdued prices for cereals, not helped by continued grain imports, and huge disparity with milk contracts.”

He added: “This sharp decline isn’t just about economics – it’s about the viability of farming businesses and the communities they support.”

For many, farmers and crofters, Mr Connon said farm support payments are the only thing keeping the gates open.

“Without it, vital parts of our food system and rural economy simply wouldn’t survive,” Mr Connon said.

As a result, the NFU is urging the wider farming supply chain to provide fairer returns and incomes to primary producers, many of whom the union said are facing “crippling cost pressures and reduced margins”.

Mr Connon said farmers need a support framework that gives them confidence to invest in the future and produce food sustainably.

“Farmers and crofters are part of the solution to climate and biodiversity goals, but we need fairer and sustained returns through supply chains, and a support framework that gives confidence to invest, produce food sustainably and plan for the future,” he said.

In short, he stressed the need for certainty through the Agriculture and Rural Communities (Scotland) Act.

News of declining farm profits come just months after the NFU criticised recent UK Government proposals on inheritance tax, warning they would compound an already dire situation for family-run farms.

Under Labour’s proposals, farms passed to a son or daughter will be subject to much higher taxes than in previous administrations – causing many to fear that farmers will become priced out of the industry.

Chancellor Rachel Reeves said the tax changes applied to family farms and businesses will “help protect family farms” with the first £1m worth of assets getting a 100% tax relief. A 20% tax will apply past that threshold.

Previously, the taxes to pass on a family farm were minimal.

However, farmers said the £1m value is far too low a figure, and doesn’t begin to cover the value of land required for a profitable farm.