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grazing farms. It is interesting to note that in only two of the English regions does


core agricultural activity represent more than half total Farm Business Income: the West Midlands and the South West. These two regions also have the lowest proportion of Farm Business Income made up of receipts from the Single Farm Payment, 37 per cent and 39.4 per cent respectively. Yet, while all other regions have less than half of their Farm Business Income made up of their core dairying activity, it remains that even the West Midlands and the South West have a significant proportion of their total Farm Business Income made up of activities other than dairying. The North West, which includes Cheshire and Lancashire and


which many would regard as a prime area of English milk production, surprisingly in fact only generates slightly in excess of a third of its Farm Business Income from agricultural output while more than half originated from the Single Farm Payment, not far behind London and the South East – not a region that springs readily to mind where agriculture, let alone dairying is concerned. The latter, along with the East of England derived more than a fifth of the total Farm Business Income from diversification. The East of England was the only English region where dairy farms managed to make a loss on their core agricultural activities in 2009-10. Grazing livestock in the Less Favoured Areas does not feature


as a major agricultural activity in both London and the South East and in the East of England. But in other regions of England, this type of livestock production is critically dependent upon the Single Farm Payment together with various agri-environmental payments in that all regions for which data is available made negative returns on their core agricultural activities (Table 9). The situation is very similar with regard to grazing farms in


the lowlands where the East Midlands was the only region where agricultural activities yielded a positive return but only to the extent of 11.4 per cent of Farm Business Income; 63.4 per cent of the latter was derived from the Single Farm Payment with almost 15 per cent derived from agri-environmental payments. Finally, what might be the picture that emerges in October of this


year when the first estimates of Farm Business Incomes for the twelve months ending February 2011 are published?


100


20 40 60 80


-40 -20 0


North West West Midlands East Midlands East of England London & the South East


Agricultural Output Agri-Environment Payments Diversification South West Single Farm Payment DEFRA has already made a guess at what could transpire for the


feed industry’s livestock customers and it does not make for pleasant reading, either for the farms concerned or their suppliers.


Figure 6: Forecast Livestock Farm Business Incomes in England 2010 - 11


10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000


0 Dairy Grazing


Livestock - Lowlands


Grazing Livestock -


Less Favoured Areas


DEFRA has based its projections for 2010-11 on information


available in early January 2011. The projections are intended as ‘a broad indication’ of how Farm Business Incomes for each farm type are expected to move relative to 2009-10. Sterling’s appreciation against the Euro on 30 September 2010


relative to 2009 will have the effect of reducing the average value of the Single Farm Payment in sterling terms [3]


. Dairy farms are expected


to experience a fall in average Farm Business Income of around a quarter compared to 2009-10. This reflects the fact that, although total farm output is expected to increase, reflecting higher average milk prices for the twelve months ending in February 2011, higher


Table 9: Grazing Farms’ Farm Business Income in Less favoured Areas by English Region and Cost Centre 2009-10


(*) Government Office Region


North East North West


Yorkshire & the Humber West Midlands East Midlands South West


Agricultural Output


£ per Farm


-1,325 -9,178 -2,114 -3,723 -5,409 -6,440


% of FBI -4.5


-47.3 -7.9


-22.5 -24.9 -33.1


Agri-Environment Payments


£ per Farm


8,642 9,743 9,232 5,041 9,327 6,907


% of FBI


29.2 50.2 34.4 30.5 43.0 35.4


Source: Farm Business Survey - Government Office Region Reports. (*) Note that data for the East of England and London and the South East is unavailable due to small sample size PAGE 18 MARCH 2011 FEED COMPOUNDER Diversification


£ per Farm


773 850


1,882 847


1,345 953


% of FBI


2.6 4.4 7.0 5.1 6.2 4.9


Single Farm Payment


£ per Farm


21,502 17,986 17,841 14,370 16,426 18,066


% of FBI


72.7 92.7 66.5 86.9 75.7 92.7


Farm Business Income


£ per Farm


29,591 19,401 26,841 16,535 21,690 19,485


% of FBI


100 100 100 100 100 100


Specialist Pigs Specialist Poultry


Mixed Farms


2009-10 Forecast 2010-11


Figure 5: Derivation of Farm Business Income for English Lowland Grazing Farms by Region 2009-10


£ per farm


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