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Structure of the agriculture sector in Scotland
APPENDIX 1
Agricultural output is estimated to account for 1.3% of Gross Value Added ( GVA) in Scotland. In employment terms the annual Agricultural Census recorded a total of around 45,000 people (measured as full-time equivalents) employed in agriculture as at June 2004. This represents 2.2% of the total workforce, or 5% of the rural workforce.
Overall performance of the agriculture sector can be gauged by looking at the estimates of Total Income from Farming ( TIFF). In real terms, the current TIFF estimate for 2005 is 11% down on the previous year but, as mentioned earlier, 54% up on 2000. There was a peak in farm incomes in the mid-1990s reflecting good harvests, strong European and world prices, and the favourable exchange rate, which benefited both exporters of agricultural produce and recipients of CAP subsidies. Incomes fell rapidly in the late 1990s as the value of the pound rose, commodity prices fell and the impact of BSE hit the livestock sector. The effects of Foot and Mouth Disease ( FMD) in 2001 compounded the position, and it was only in the aftermath of that outbreak that agriculture began to recover.
Labour usage figures show a continued, gradual decline, reflecting reduced labour requirements as a result of continued mechanisation across the industry and consolidation of farm holdings in some sectors. The estimated number of farm businesses in Scotland has fallen by 10% in the past six years.
The following tables provide snapshots of the current profile of the agriculture and food manufacturing sectors in Scotland. Further information on agricultural statistics, including long-term trends, is available at http://www.scotland.gov.uk/Topics/Statistics/15631/2536
Key Facts on Scottish Agriculture
| Latest available figure | Year | Notes |
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Gross value added |
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GVA in agriculture in Scotland | £957m | 2002 | Gross Value Added ( GVA) measures the contribution to the economy of an industry. |
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GVA in agriculture as % of total GVA in Scotland | 1.3% | 2002 | |
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GVA in food manufacturing | £1.2bn | 2002 | |
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GVA in food manufacturing as % of total GVA in Scotland | 1.6% | 2002 | |
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Employment |
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Number of full-time equivalents mployed in agriculture in Scotland | 45,000 | 2004 | The total agricultural workforce (includes total number of occupiers, spouses, and employees working full-time, part-time and casually) is adjusted to full-time equivalents based on Annual Work Units. |
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Agriculture as % of total full-time equivalents employed in Scotland | 2.2% | 2004 | |
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Agriculture as % of all full-time equivalents in rural Scotland | 5% | 2004 | Rural areas are defined as local authorities with a population density of less than 1 person per hectare. |
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Number of employees in food manufacturing in Scotland | 28,700 | 2003 | Excludes fish processing. |
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Food manufacturing as % of total employees in Scotland | 1.2% | 2003 | Excludes fish processing. |
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Food manufacturing as % of total employees in rural Scotland | 1.5% | 2003 | Excludes fish processing. |
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% of total food manufacturing employees in Scotland that are in rural Scotland | 33% | 2003 | Excludes fish processing. Rural areas are defined as local authorities with a population density of less than 1 person per hectare. |
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Income |
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Total Income From Farming ( TIFF) | £436m | 2005 | TIFF represents the aggregate financial performance of the agriculture sector in Scotland. |
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% change in Total Income From Farming | -11% | 2004 to 2005 | Expressed in real terms (that is, after allowing for inflation). |
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% change in Total Income From Farming | +54% | 2000 to 2005 | Expressed in real terms. |
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Net Farm Income | £13,122 | 2004/05 | Net Farm Income measures the level of return to the farmer and spouse for their manual and managerial labour and for certain assets that they invest in their agricultural business. |
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% change in Net Farm Income | -35% | 2003/04 to 2004/05 | Expressed in real terms. |
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% change in Net Farm Income | +202% | 1999/ 2000 to2004/05 | Expressed in real terms. Net Farm Income fluctuates from year to year. |
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Expenditure on schemes |
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Pillar 1 | £399m | 2004 scheme year | |
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Pillar 2 (excluding LFASS) | £35m | 2004 scheme year | |
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Less Favoured Area Support Scheme ( LFASS) | £61m | 2004 scheme year | |
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Performance of top and bottom 25% of farms |
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Change in Net Farm Income for top quartile of farms | -11% | 2003/04 to 2004/05 | Top 25% of farms ranked according to their performance in terms of net farm income. |
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Change in Net Farm Income for bottom quartile of farms | -134% | 2003/04 to 2004/05 | Bottom 25% of farms ranked according to their performance in terms of net farm income. Means that these farms are making bigger losses. |
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Input cost as % of total output for top quartile of farms | 75% | 2004/05 | Top 25% of farms ranked according to their performance in terms of net farm income. |
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Input cost as % of total output for bottom quartile of farms | 2% | 2004/05 | Bottom 25% of farms ranked according to their performance in terms of net farm income. |
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Farm diversification |
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% of farms engaged in any form of on-farm diversification | 22% | 2005 | Based on main holdings. |
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Source of inputs and destination of outputs |
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% of all inputs to food manufacturing that are sourced from Scottish agriculture | 36% | 2002 | Based on agricultural inputs to food manufacturing as a proportion of intermediate consumption (total inputs from domestic industries plus imports). |
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% of all output from Scottish agriculture remaining in Scotland | 82% | 2002 | |
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A Forward Strategy for Scottish Agriculture set out net farm income ( NFI) figures for each of the main sectors. These figures demonstrated the spread of profitability within and between the sectors and can be compared with the latest detailed figures from the Farm Accounts Survey (figures are adjusted for inflation). It is important to note, however, that net farm income figures tend to fluctuate greatly year to year depending on factors such as the price of produce, exchange rates and the quality of the harvest.
Average incomes (£s) per farm for selected farm types
(in 2004/05 prices)
| Bottom 25% | Top 25% | All |
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Cereals |
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999/2000 | - 8,409 | 33,073 | 11,580 |
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2004/2005 | - 19,668 | 19,504 | 1,433 |
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Dairy |
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999/2000 | - 27,623 | 35,302 | 2,034 |
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2004/2005 | - 5,417 | 64,330 | 24,567 |
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General cropping |
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999/2000 | - 26,094 | 30,862 | 3,977 |
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2004/2005 | - 33,699 | 45,228 | 4,085 |
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LFA mixed cattle and sheep |
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999/2000 | - 14,962 | 23,148 | 2,932 |
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2004/2005 | - 6,518 | 45,025 | 15,584 |
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