EXECUTIVE SUMMARY
This publication contains first estimates of Scotland's Farm Business Income ( FBI), generated from farms participating in the Farm Accounts Survey. This new FBI measure provides more relevant and more accurate estimates of incomes at the farm business level and delivers on a commitment made following the public consultation on farm income measures in 2006/07.
Farm Business Income ( FBI) replaces Net Farm Income ( NFI) as the headline farm business income measure. FBI is also more closely aligned to the aggregate level Total Income From Farming ( TIFF) measure.
The main advantages of FBI over NFI are:
- FBI treats the tenure of farms as is, reflecting actual tenure costs, unlike NFI which is based on a tenant type farming definition.
- FBI represents the return to all those with an interest in the farm business, unlike NFI which only represents the return to the farmer and spouse.
- FBI includes net interest payments, reflecting actual loan costs, whereas NFI is based on a definition of zero indebtedness.
- FBI includes income from a range of diversified activities which make use of farm resources, whereas NFI does not include diversified income.
Average results (£ per farm) for 2007/08 show that:
- FBI was £39,200 compared to £29,800 for NFI. This represents a difference of £9,400.
- FBI was greater than NFI across all farm types and ranged from £16,900 for LFA Specialist Sheep farms to £70,500 for Dairy farms.
- Differences between FBI and NFI ranged from £4,600 for Lowland Cattle and Sheep farms to £15,800 for Dairy farms.
- Differences between FBI and NFI were greatest for Owner Occupied farms, where FBI was £37,200 compared to an NFI of £23,600. Differences were least for Tenanted farms where FBI was £40,400 compared to an NFI of £37,100.
- FBI includes an overall average diversified income of £1,900, not included in NFI. The average diversified income for those farms engaged in diversified activities was £6,300. 152 (34 per cent) of the 442 farms in the sample recorded diversified activity. Tenanted farms showed low levels of additional diversified income of just £300.