HC Deb 26 January 1993 vol 217 cc677-8W
Mr. Alex Carlile

To ask the Minister of Agriculture, Fisheries and Food what plans he has to alter the legislation regarding tenant farmers; and if he will make a statement.

Mr. Curry

I refer the hon. and learned Member to the reply given to my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) on 3 December 1992 at column368.

Mrs. Dunwoody

To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on farm incomes.

Mr. Gummer

[pursuant to the reply 5 November 1992, column 340–41]: A brief summary of the provisional estimates of income, output and productivity of United Kingdom agriculture in 1992 is set out in three tables which I have placed in the Library of the House. I am pleased to say that the forecasts of income show a welcome recovery in real terms from the downward trend in recent years.

Real total income from farming, after declining during the 1980s, rose by more than 10 per cent. in 1992. Moreover, this was from a higher level for 1991 than was predicted this time last year. This has been a difficult period for farmers and we should not overstate this improvement, however welcome. But now that the reform of the CAP has been decided and a number of other uncertainties, such as the future of the agrimonetary system resolved, I believe that farmers will be able to build on these results and plan for the future with more confidence.

In detail, the figures show the following changes relative to 1991: the values of the industry's gross output and gross input at current prices have risen by 2.3 per cent. and 1.4 per cent. respectively, largely as a result of price rises in both cases. The volume of the industry's output, as indicated by gross output at constant prices, has risen by 0.5 per cent. while the volume of the industry's gross input has fallen by 1.0 per cent. These changes have resulted in increases of 3.2 per cent. in gross product and 5.2 per cent. in net product, at current prices; with the continued decline in interest rates the industry's interest charges fell by a further 16.1 per cent. However, although the number of farm workers continued to fall, the total cost of hired labour rose by 1.4 per cent.; as a result of these changes total income from farming, representing the total income from agriculture of farmers, partners, directors and their spouses and family workers, is forecast to have risen by 15.5 per cent. or by 11.4 per cent. expressed in real terms (deflating by the retail prices index). Farming income, which covers only farmers and their spouses, is forecast to have risen by 23.6 per cent. or by 19.2 per cent. in real terms; the two corresponding measures of cash flow, which may reflect more closely the variations perceived by farmers and farm households, show much smaller increases between 1991 and 1992. Cash flow for the wider group is forecast to have risen by 3.6 per cent., while that for farmers and their spouses has risen by 3.8 per cent. In real terms however, these measures have remained virtually unchanged since 1991; the industry's productivity has continued to rise. The index of gross product per whole-time man equivalent is forecast to have risen by 3.8 per cent. over the last year and by 47.7 per cent. over the last decade. However, this index does not take into account changes in inputs other than labour. An alternative measure, gross output per unit of all inputs, is forecast to have risen by 3.3 per cent. over the last year and by 23.9 per cent. over the last decade; Incomes were higher on most types of farm over the last year though, as usual, there was some variation in the fortune of different types of farm throughout the United Kingdom. The net farm income on dairy farms has risen and higher levels of subsidy have contributed to increases on most hill and upland livestock farms over the past two years. However, on lowland livestock farms there is considerable variation between different parts of the country and from year to year, with farms having a higher proportion of cattle than sheep tending to perform better. Cropping farms, particularly those specialising in cereals, have benefited from higher output prices. The intensive livestock sector has been affected by low egg prices and increasing feed costs which have almost offset the effects of higher pigmeat prices.

The tables also contain revised estimates for 1991. These show that total income from farming rose in 1991 by 4.3 per cent. rather than fell by 6 per cent.—the forecast last year. Similarly, farming income is now estimated to have risen by 1.1 per cent. in 1991, against last year's forecast of a fall of 14 per cent.

More detailed information will be contained in "Agriculture in the United Kingdom 1992" which this year will be available in March. This change in the month of publication is designed to improve the quality of the forecasts for the latest year. "Farm incomes in the United Kingdom 1991–1992", which contains details for individual farm types and aggregate dates for each country of the United Kingdom, will also be available in March.