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Section A Aggregate Output, Input and Income.
Introduction
The aggregate output, input and income figures reflect the estimated value of outputs from, and inputs to, Scottish agriculture over the calendar year.
Results for the UK are published in 'Agriculture in the United Kingdom 2007'. An electronic copy of the UK report is available at: http://statistics.defra.gov.uk/esg/publications/auk/
Aggregate Results
Total Income From Farming ( TIFF) is estimated to increase by around 16.7 per cent (£90.0 million) over the previous year before inflation is taken into account. In real terms, this represents a rise of around 11.9 per cent.
Farm Crops
Cereals output increased by 57.3 per cent (£121.4 million). This increase is due to market price increases for all cereals, in particular wheat where the average wheat price per tonne has risen by over 42 per cent in 2007. The increase in cereal prices follows recent trends in world markets that have been fuelled by rising global demand and a drop in production in major producing regions due to droughts. Global stocks of wheat and other grains have been falling in recent years, which has also contributed to rising commodity prices on the world market.
Livestock and Livestock Products
The output value of finished cattle and calves has increased in 2007 by £4.1m (just over 1 per cent), mainly due to an increase in output values for cows and bulls.
The value of finished sheep and lambs decreased in 2007 by just under 1 per cent (£0.8 million) and the value of store sheep also decreased in 2007 by £1.7m (16.2 per cent).
Finished pig output values remained relatively stable between 2006 and 2007 at around £57.5m while poultry sector output values increased by 2.8 per cent (£2.0 million) in 2007.
Capital formation (i.e. the value of incoming and retained livestock) shows an increase of £13.8 million (up 24.6 per cent), primarily due to a partial recovery from low capital formation values in 2006 (specifically for dairy cattle and ewe lambs).
The output value of Total Livestock Products (milk and milk products, eggs for food, clipwool and other livestock products) increased by 8.3 per cent (£22.9 million). An increase in the average price paid per litre for milk has contributed to a rise of 8.4 per cent (£20.5 million) in the value of milk and its associated products.
Payments
In 2007, the Single Farm Payment ( SFP) was valued at £393.7 million, an increase of £5.3 million (1.4 per cent) on the 2006 levels, mainly due to a more favourable exchange rate in 2007 (as SFP is initially valued in Euros). It should be noted that in 2007 a higher rate of overall modulation (9.3 per cent) was applied than in 2006 (8 per cent). This rate of modulation has been applied to account for the "franchise effect", i.e. the first â'¬5,000 of a farmer's payment is effectively exempt from EU modulation.
Inputs
There was an overall increase in input items in 2007 of 9.3 per cent (£111.2 million), primarily due to a 19.2 per cent increase in feedingstuff costs (£60.6 million). Fuel and oil costs increased by 7.3 per cent (£5.2 million). Fertilisers and lime costs increased by 7.1 per cent (£9.4 million), seeds by 10.2 per cent (£5.0 million) and other farm costs by 3.0 per cent (£9.1 million).
Only two input costs fell in 2007, with Leasing of Quotas falling by 59.3 per cent (from £27k to £11k) and Landlord farm maintenance costs falling by just over 1 per cent to £6.9 million.
The amount of interest paid in 2007 has increased by 19.2 per cent (£20.2 million) reflecting both the increasing interest rates up to mid-2007, and an increase in lending for farming purposes up 6.3 per cent to £1,358 million. Hired labour costs have also increased by 2.7 per cent (£7.5 million) due to increased wage costs for farm workers.
Balance Sheet
Overall the total value of assets is estimated to increase by £340 million to £14.9 billion. This is mainly due to increases in the value of Financial Assets and of Land and Buildings.
Total liabilities are estimated to increase by £260 million to £2.360 billion. The estimated net worth of the industry in 2007 (calculated by subtracting total liabilities from total assets) has increased by 0.6 per cent to just over £12.5 billion. Net worth as a percentage of total assets decreased slightly to 84 per cent.
Additional notes
The aggregate results for 2007 are provisional and are based on the latest information that was available in late 2007. In some cases, full information becomes available later than the publication deadline. The 2007 estimates are, therefore, subject to revision in the next Annual Review in January 2009.
The 2007 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).
Subsidy payments are recorded on an accruals basis (i.e. amounts that were allocated to a particular year, irrespective of when actual payments were made).
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