2/7/2002

The agricultural industry and the rural economy of Wales is still on its knees.

That’s the graphic picture painted by the latest farm profits survey from the institute of chartered accountants' farming & rural business group.

The 2002 England and Wales survey is collated from respondents who represent 244 farms accounting for 41,242 hectares of countryside. 17% of the survey responses came from Wales.

The survey in Wales shows that more Welsh farms are making a loss in the year 2001-2002 than in the previous year. In the current survey 15% of farms in Wales are making a loss compared to just 12% a year ago - a 25% increase in farms making a loss.

The average loss on the Welsh farms surveyed is around £5,561, though 2% of farms surveyed reported a loss of over £20,000.

In addition to the questions on farm accounts, 188 chartered accountants, whose client base consists mainly of rural businesses, were asked for their views on the rural economy in the UK as a whole. 93% thought the future of farming was poor or very poor. This cannot be helped by the associated fact that over 80% of respondents saw the number of cases where children are taking on the family farm were in decline.

However, the news was mixed in terms of farm diversification in the rural economy in Wales. Despite being urged to diversify, Welsh farmers are still resilient to do so as some 93% of farms surveyed in Wales did not have any diversification activities.

Of those farms that did show diversification activity, the percentage of farm income raised by diversification was less than 10% in one third of those relevant farms.

Commenting on the survey, Aubrey Davies, Colwyn Bay based Chairman of the Farming & Rural Business Group, said "This survey graphically confirms our gut feeling - that farmers across Wales are continuing to struggle to make ends meet and are having to put ever increasing amounts of their own money into the business to stay afloat.

“What is even worse is that the survey figures are based on results for the 2001 harvest and 2001/2002 milk prices. Since March we have seen falls in both milk and corn prices and therefore next years figures could be even worse. Politicians at all levels of Government, from Cardiff to Westminster and Brussels must address the very real crisis facing the rural economy before more damage is done."

Source:	Institute of Chartered Accountants
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