Economic Report on Scottish Agriculture 2003 Edition
Section A
Aggregate Output, Input and Income in 2002
Introduction The 2002 estimates of agricultural output, input and income for the UK are described in 'Agriculture in the United Kingdom 2002', published by The Stationery Office in April 2003 on behalf of the UK Agriculture departments. The Scottish estimates given in this report correspond to those in the combined UK publication. The aggregate income figures reflect the estimated value of output and inputs to Scottish agriculture over the calendar year. Subsidy payments are also incorporated into output and income estimates on an accruals basis, ie they are shown in the year in which they became due to be paid. Normally this is the year in which the farmer carries out the production to which the subsidy relates.
Commentary
Aggregate The 2002 estimates are provisional. They were calculated during November
Results 2002 - January 2003 and were based on the latest available information at the time. While information on outputs is largely complete, data on input figures tend to become available later, sometimes with significant delay. The forecasts are, therefore, subject to revision in the next Annual Review.
The 2002 forecasts for Scottish agricultural output, input and income are shown in Table A1. Total Income From Farming (TIFF) measures business profits plus income to workers with an entrepreneurial interest (farmers, partners, directors and their spouses, and most other family members who work on the farm).
Overall TIFF is forecasting an increase of around 15% (43 million) from last year.
Farm Crops The cereals sector (in particular barley) has suffered from low prices and, in some cases, poor quality, which have combined to drive down returns leading to an overall fall in the value of output of over 6%. The value of the potato crop fell by 12% reflecting poor prices throughout the year.
Livestock and Livestock Products The value of livestock (878 million) is forecast to rise by 13% in 2002.
This reflects the recovery of the cattle and sheep output from the effects of Foot and Mouth Disease in 2001. Numbers of cattle and sheep are up and the prices paid for breeding stock have risen. Finished pigs showed a marginal increase and poultry experienced a small decrease. Livestock products fell by 10% (28 million approximately) mainly due to a decrease in the price being paid for milk.
Direct Payments The value of direct payments (those included in commodity output and as sundry receipts in the accounts) to Scottish agriculture in 2002 is estimated to be at 493 million, an increase of around 40 million from 2001. This increase is mainly due to the increased payments in the cattle and sheep schemes.
Inputs The gross input value is forecast to increase slightly to 1,069 million in 2002, there were rises in the cost of feeding stuffs and in the miscellaneous expenses category (eg machinery repairs, contract working). The interest bill is forecast to decrease by about 8 million (9%) from 2001 due to the relatively low level of bank borrowing rates throughout 2002.
Balance Sheet Overall the total value of assets increased by 730 million to 13.5 billion. This is mainly due to value of Land and Buildings and FMD payments.
Long and short term liabilities are estimated to decrease by 15 million to 1,624 million with most of the decrease in the short term category. The net worth of the industry has increased by 7% to 12 billion from 2001 (calculated by subtracting total liabilities from total assets) but still remains at around 88% of the value of total assets.