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Scottish Agricultural Survey 2003
The Lloyds TSB ScotlandScottish Agricultural Survey 2003
by
Prof. Donald J R MacRae
Scottish Agricultural Survey 2003
The Scottish Agricultural Survey 2003
Sample date: 2nd Dec’02 - 12th Jan’03
No. mailed: 1,514
No. responded: 456
Response rate: 30%
Random selection
Anonymous
Scottish Agricultural Survey 2003
The Scottish Agricultural Survey 2003
Representative of full time farmers
Median farm size 450 acres
All farm types represented
Geographically distributed
Owner / occupation 75%
Scottish Agricultural Survey 2003
“How prosperous do you considerthe Scottish agricultural industry to be?”
3
46
59
69 69
49
55
14
43
33
27 26
43
34
52
107
4 58 10
27
1 1 14
1996 1998 1999 2000 2001 2002 2003
per centnot . . . very
Scottish Agricultural Survey 2003
“How prosperous do you considerthe Scottish agricultural industry to be?”
1.4
1.9
1.61.5 1.6
1.3
1.71.8
1.61.7
Arable Dairy Livestock Mixed Hill
2002 2003
On a scale of 1 to 5: 1 = not, 5 = very
Scottish Agricultural Survey 2003
“How optimistic are you about the future of agriculture in Scotland?”
34
23
32
41 42 43
21
29
23
36
21
2001 2002 2003
per centnot . . . very
Scottish Agricultural Survey 2003
“How optimistic are you about the future of agriculture in Scotland?”
2.1
2.3
2.2 2.22.3
1.7
2.02.1
2.0
2.3
Arable Dairy Livestock Mix Hill
2002 2003
On a scale of 1 to 5: 1 = not, 5 = very
Opinions of types of farmers
Scottish Agricultural Survey 2003
“Was your business profitable in your last complete financial year?”
54
63
50
68
49
5963
77
60 61
48
6365
86
70 70
57
70
Arable Dairy Livestock Mixed Hill Overall
Opinions of types of Farmers
2001 2002 2003% responding “YES”
Scottish Agricultural Survey 2003
“Did your pre-tax profit exceed your personal drawingsin your last complete financial year?”
40
44
51
3840
43 43
29
42
46 4548
35
61
57
48
53
4946
40
5153
51
2001 2002 2003
Arable Livestock Hill All 0- 201- 301- 501- 1001+ Dairy Mixed 200 300 500 1000
Farm type Farm size
% responding “YES”
Scottish Agricultural Survey 2003
“What is your forecast of the following product prices (ex-farm) in autumn next year?”
Forecast
2002 2003
Milk pence per litre 20.5 18.1
Finished cattle pence per kg lw 104 102
Avge. all pig price pence per kg dw 108 87
Lamb pence per kg dw 186 215
Feed barley £ per tonne 66 62
Malting barley £ per tonne 78 81
Feed wheat £ per tonne 74 67
Scottish Agricultural Survey 2003
“What will bank Base rate be in 12 months time?”
2002 estimate = 4.81%
(December 2002 actual 4.00%)
2003 estimate = 5.02%
Scottish Agricultural Survey 2003
“What will be the level of retail price inflation (RPI) in 12 months time?”
2002 estimate = 2.72%
(December 2002 actual x%)
2003 estimate = 2.94%
Scottish Agricultural Survey 2003
“Do you expect your business to be profitable in this financial year?”
48 49 47 47
36
47
56
84
5256
43
59
5248
5549
5651
Arable Dairy Livestock Mixed Hill Overall
Opinions of types of farmers
2001 2002 2003
% responding “YES”
Scottish Agricultural Survey 2003
4
19
19
20
25
33
34
44
13
15
12
13
16
18
26
26
Land
Buildings
Increased livestock
Quota
Motor vehicles
Tractors
Improvements
Plant/equipment
% of respondents
estimated in last year's survey
actual
Investments anticipated for 2002and actual investment made in 2002
Scottish Agricultural Survey 2003
13
5
8
14
13
16
27
19
12
13
13
15
16
18
26
26
Increased livestock
Land
Quota
Buildings
Motor vehicles
Tractors
Improvements
Plant/equipment
% of respondents
anticipated for 2002
anticipated for 2003
Investments anticipatedfor 2002 and 2003
Scottish Agricultural Survey 2003
Increase Decrease Exit Balance % % % (increase minus
decrease & exit)
-6
+3
+15
-11
-25
“In the next five years, what are your plans for the following?”
-23
-10
-5
-14
-5
Exit
Arable acres
Dairy herd
Beef herd
Sheep flock
Pig herd-7
-12
-11
-6
-16
Decrease %
5
11
31
23
15
Increase
Scottish Agricultural Survey 2003
“Do you usually prepare a detailed budget for the next financial year?”
40 % ‘YES’
“What source/s of financial information do you useto run your business?”
% of respondents
• Monitoring actual cash position from regular bank statements 78
• Year end tax accounts 62
• Regularly updated management accounts 39
• Monitoring actual monthly cash flow against budgeted cash flow 30
• Other 15
Scottish Agricultural Survey 2003
“Which of the following do you currently use for business/financial advice?”
% using
• Accountant 81
• SAC 41
• Bank manager 35
• Agricultural consultant 18
• Other 9
• Farm secretary 8
Scottish Agricultural Survey 2003
% of respondents saying ‘NO’
• Options for successful collaboration with other farm businesses 47
• Making the best use of farm business assets 37
• Availability of grants and subsidies 35
• Medium and long term business planning 33
• Controlling overheads 27
• Improving farm technical performance 26
• Financial planning and budgeting 21
“Do you receive adequate advice/guidance on the following?”
Scottish Agricultural Survey 2003
“How many hours, on average, do you workin the farm business per week?”
107
40
34
8
1
0 to 20 21 to 40 41 to 60 61 to 80 81 to 100 101+
Hours worked
%
Average = 58 hours
“How many hours a week do you spend completing returns for government agencies?”
Average = 3.5 hours (last year 3.8 hours)
Scottish Agricultural Survey 2003
Farm type
last year last year
Hill -21 69
Mixed -15 68
Livestock -12 58
Dairy -18 73
Arable -15 65
Overall -15 66-14
-13
-18
-20
-10
-6
66
67
63
56
69
80
% NO % YES
“Do you plan to be farming in 5 years time?”
Scottish Agricultural Survey 2003
“In how many years do you plan to retire?”
21
24
1917
19
0 to 5 6 to 10 11 to 15 16 to 20 21+
Years to retirement
% Average = 13.0 years
Scottish Agricultural Survey 2003
“Is there a successor to yourself in placeto carry on the farm business?”
48
63
33
50
61
4945
68
4945
52 50
Arable Dairy Livestock Mixed Hill Overall
Opinions of types of Farmers
2002 2003% responding “YES”
Scottish Agricultural Survey 2003
46
23
31
36
6 6
2927
32
1 2 3 4 5
per cent in favour
2003 2003
“What is your attitude to a Government/EU funded retiral scheme for farmers?”
strongly against strongly in favour
Scottish Agricultural Survey 2003
“If a Government /EU farmer retiral scheme was available, would you use it to retire?”
54
4851
5861
5450
6460
51
46
54
Arable Dairy Livestock Mixed Hill All
% responding “YES”
Scottish Agricultural Survey 2003
“Do you currently operate any of the following?”
% YES
• Limited partnership 30
• Contract farming 12
• Share farming 2
Scottish Agricultural Survey 2003
very bad bad no effect good very good
“What effect do you think the following will have on the agricultural
industry in Scotland?”
'Modulating' or capping payments to large farm
businesses
23
26
23
12
16
The 'decoupling' of support payments from
production
3230
1715
6
Replacing support payments by 'Rural
Development' programmes
33
26
17
11
3
Scottish Agricultural Survey 2003
“What effect will the following have on Scottish agriculture?”
Euro (Single Currency)
58%
26%
16%
Positive None Negative
Farm Assurance Schemes
52%
12%
36%
Positive None Negative
Scottish Agricultural Survey 2003
30
45
57
52
71
75
57
82
28
37
44
60
67
75
61
82
0 20 40 60 80 100
Lack of demand
Interest rate rising
Weather problems
Food safety scares
EU policy changes
Supermarket power
Increasing input costs
Imports to UK
last year
this year
“What factors are most likely to limit the prosperity of Scottish agricultural businesses in the future?”
%
Scottish Agricultural Survey 2003
“How important will the following be to the future prosperityof Scottish agriculture?”
1.7
2.5
2.7
3.1
3.2
3.2
3.3
3.4
3.6
3.7
3.7
4.4
1 2 3 4 5
1. EU agricultural policy (1)
2. UK agricultural policy (3)
3. Exporting (2)
4. Marketing co-operation (4)
5. Auction marts (6)
6. Co-operatives (7)
7. Scottish NFU (5)
8. Machinery rings (8)
9. Assurance schemes (9)
10. Diversification (11)
11. ‘Green’ Image (10)
12. Organic farming (12)
Ranking On a scale of 1 to 5: 1 = not, 5 = very
not important very important
(ranking last year)
Scottish Agricultural Survey 2003
“Are you in favour of farm scale GM crop trials?”
% responding “YES”2001 642002 622003 62
“How important for the future of agricultureis the ability to use GM technology?”
3.1 2.9 3.1
2001 2002 2003
On a scale of 1 to 5: 1 = not, 5 = very
Scottish Agricultural Survey 2003
“Do you believe that substantial reform of the CAP is necessaryfor the long term future of Scottish agriculture?”
55
75 7467
74 7164
1996 1998 1999 2000 2001 2002 2003
% responding “YES”
Scottish Agricultural Survey 2003
“Should quotas / premium rights be continued in the long term?”
6674 72
65 6167 64
1996 1998 1999 2000 2001 2002 2003
% responding “YES”
Scottish Agricultural Survey 2003
“Are you in favour of the UK joining the single European currency (Euro)?”
1998 64
1999 73
2000 55
2001 52
2002 57
2003 55
% responding “YES”
“Are you in favour of enlargement of the European Union?”
27% responded “YES”73% responded “NO”
Scottish Agricultural Survey 2003
“Please indicate your preference for the future of Scottish agriculture:”
6
14
45
17
18 (16)
(22)
(44)
(14)
(4)
(% last year)
No subsidies / free market
Low subsidies / almost free market
Moderate subsidies /partially controlled market
Fairly high subsidies / controlled market
High subsidies / highly controlled market
%
Scottish Agricultural Survey 2003
“How should subsidies / support be paid?”
11
7
35
24 23
910
36
2421
2002 2003
all as price support
mostly price support
equal mixture of pricesupport & direct pays
mostly direct payments
all as direct payments
%
Scottish Agricultural Survey 2003
“Do you support the pre-emptive ‘Right to Buy’ for tenanted farmland?”
“Do you support an absolute ‘Right to Buy’ for tenanted farmland?”
37
70
45
Owner Tenant All
% saying ‘YES’
10
35
16
Owner Tenant All
% saying ‘YES’
Scottish Agricultural Survey 2003
49
24 24
2 1
1 2 3 4 5
% on a scale of 1 to 5: 1 = decrease a lot 5 = increase a lot
Decrease a lot no change increase a lot
“What change will the introduction of a pre-emptive ‘Right to Buy’ have on the availability of any kind of tenancy agreement?”
Scottish Agricultural Survey 2003
“Do you believe that sufficient preventative measures are in placeto prevent a re-occurrence of foot and mouth disease (FMD)?”
77%
23%
No
Yes
“If ‘NO, why?”
8%
92%
Other
Lack of Meat ImportRegulations
Scottish Agricultural Survey 2003
“How effective was the recent ‘direct action’ by the NFUS in securing a farmgate increase in milk price?”
5
15
27
39
14
1 2 3 4 5
% On a scale of 1 to 5: 1 = not, 5 = very
not at all effective very effective
Scottish Agricultural Survey 2003
“What is your attitude towards further ‘direct action’in all product areas?”
6
12
33
25 24
1 2 3 4 5
% On a scale of 1 to 5: 1 = not, 5 = very
strongly against strongly in favour
Scottish Agricultural Survey 2003
68%
1%
19%
8%4%
Scottish Conservatives
Scottish Labour
Scottish Liberal Democrats
Scottish National Party
Other
34%
5%
34%
18%9%
“Which political party will you vote for in the Scottish parliamentary election in spring 2003?”
First vote Second vote(80% answered) (68% answered)
“Has Scottish agriculture benefited from devolution?”
29% YES 71% NO
Scottish Agricultural Survey 2003
“What is your estimate of the trend in the total numberof farm businesses over the next five years?”
8
33
42
15
1
6
33
45
14
2
0
10
20
30
40
50
-30% -20% -10% -5% 0% 5% 10% 20% 30%
% change in number of farms in 5 years
2002
2003
% of respondents2002 average 14% fewer farms2003 average 15% fewer farms
Scottish Agricultural Survey 2003
Results• 51% made insufficient profit in 2002 to cover personal drawings.
• 70% were profitable in last complete financial year.
• 51% expect to be profitable in this financial year.
• Investment to fall in 2003 compared to 2002.
• 2003: expansion in beef, dairy static, contraction in arable and sheep, significant fall in pigs.
• 2003: optimism for future falls: pronounced falls in dairy and arable.
• Strong opposition to ‘decoupling’ and ‘rural development’, opposition to ‘modulation’.
• 55% support Euro entry.
• 40% usually prepare a detailed budget for the next financial year.
• 78% monitor actual cash position from regular bank statements.
• 41% use SAC for business/financial advice (81% an accountant).
• 47% receive inadequate advice/guidance on collaboration with other farm businesses.
• 77% believe insufficient preventative measures in place to prevent FMD, principally meat imports.
• 18% oppose ‘direct action’ in all product areas, 33% neutral, 49% support.
• Strong support for Scottish Conservatives, switching to Lib Dem. and SNP in 2nd vote in Scottish election.
• Absolute right to buy not supported but division in pre-emptive right to buy.
• 50% have no successor in place to carry on the business.
Scottish Agricultural Survey 2003
Conclusions• Industry income increased slightly in 2002.
• Optimism for future falls across all types except hill.
• Next 5 years: 15% fewer farm businesses.
• 21% plan to retire within 5 years.
• Expansion forecast only in beef.
• Demand for advice/guidance on working with other farm businesses.
• No belief in FMD control measures.
• Strong opposition to ‘decoupling’ and replacing support payments by rural development programmes.
• Support for ‘direct action’ evident.
• Little support for current largest political party.
• Support for pre-emptive ‘right to buy’.
• High potential for structural change.
• Farming prospects stall despite improving profitabil