The 1997 estimates of agricultural output, input and income for the UK are described in ‘Agriculture in the United Kingdom 1997’, published by HMSO on 17 March on behalf of the UK Agriculture Departments. The Scottish estimates given in this section correspond to those in the above publication. The aggregate income figures reflect the estimated value of output and inputs to Scottish agriculture over the whole of the calendar year. As gross output includes the value of commodity subsidies and other sundry payments to agriculture paid in the calendar year 1997, these are incorporated in the income figures.

The 1997 estimates are provisional. They were calculated during November 1997 - January 1998 and were based on the latest information available at that time. The information on output covers much of the year, but input information tends to become available later, sometimes with a significant delay. The 1997 estimates, therefore, include some forecasting and are subject to revision in the next Annual Review exercise using later information.

The 1997 forecasts for Scottish agricultural output, input and income are shown in Table A1. Largely as a result of the strength of sterling, lower prices were experienced across almost every major commodity resulting in a substantial decrease in output value. Although prices dropped for some inputs (again as a consequence of sterling’s appreciation), this was not enough to prevent farming income experiencing a sharp fall. The value of gross output is expected to have fallen by around 8 per cent on the 1996 level, to stand at just under £1.9 billion, and gross input is estimated at £944 million, over 3 per cent below the 1996 value. Net product, or the return to land, labour, capital and managerial factors, is forecast at £696 million, almost 15 per cent lower than in 1996. Total Income from Farming (TIFF), which measures the return to the farming family, is expected to have fallen by about 28 per cent to £363 million. Farming Income (FI), or the return to the farmer and spouse, is forecast at £280 million, around 34 per cent below the previous year. In real (i.e. inflation-adjusted) terms, the fall in TIFF is equivalent to 30 per cent, while FI fell by around 36 per cent. In real terms aggregate Scottish farm incomes are still above the levels of the late 1980s and early 1990s.

All the 1997 income estimates, being the difference between large sums of outputs and inputs, are subject to a margin of error. Revisions will take place as fuller information becomes available. The results of current revisions to the 1996 estimates published last year has been to decrease TIFF from £519 million to £502 million and FI from £443 million to £426 million.

Overall, the total value of assets increased by £322 m to £9.7 billion. The value of total fixed assets are estimated to be up £396 million to £8.3 billion in 1997, mainly due to higher valuations for land and buildings. Current assets fell by about £74 million to £1.4 billion, largely as a result of falls in the values of trading livestock and crops and stores.

Long and medium term liabilities are forecast to have increased by about £110 million to £1.5 billion with most of the increase being in the short term category. The net worth of the industry rose by just under 3% (calculated by subtracting total liabilities from total assets) and continues to be stable at 85% of the value of total assets.