3.1 Total Income from Farming (TIFF)(Table A1)
TIFF is the headline national-level measure of farm income, or profit. The total net income from farming is calculated using a range of data covering each factor of output and cost for Scottish agriculture. This means obtaining volume and price data for each type of crop and livestock, collecting data on income from other sources, and estimating the cost of each aspect of production, e.g. seed, feed, fuel, or labour.
Chart 3.1: Total Income from Farming (in real terms) 1994 to 2014
Over the past ten years there has been a general upward trend in TIFF, which has increased by £231 million (51 per cent or 19 per cent in real terms) since 2004, from £457 million in 2004 to a provisional estimate of £688 million in 2014. The estimate
for 2014 suggests that TIFF decreased by £136 million (17 per cent or 18 per cent in real terms) from 2013, after an increase of £194 million (31 per cent or 28 per cent in real terms) between 2012 and 2013. The value of TIFF is greater than the value of subsidies, suggesting the industry would still make a small profit without them. This, however, is not the same as the findings of the Farm Accounts Survey (compare section 3.3, see also chart 6.2).
Chart 3.2 shows the contributing components of TIFF, with output and total payments and subsidies showing the positive contribution and input costs, other costs and consumption of fixed capital showing the negative contribution. Initial estimates for 2014 were outputs at £3.03 billion, support at £511 million, and costs of £2.85 billion.
Chart 3.2: Contributing components of TIFF 2004 to 2014 (actual prices)
Since 2004 the output value (net of subsidies) from agricultural businesses has increased by £1,307 million (76 per cent, 39 per cent in real terms), and total payments and subsidies have decreased £30 million (six per cent, or 25 per cent after accounting for inflation). Over the same period, total costs have risen by £1,046 million (58 per cent, or 25 per cent relative to general inflation).
The overall value of TIFF is calculated as the small difference between the large values of gross income and costs. This makes it quite sensitive to small percentage changes in these larger values. Between 2013 and 2014, gross income decreased by £103 million (three per cent) and costs decreased by £36 million (one per cent). These small percentage changes resulted in a decrease in TIFF of £136 million (17 per cent, or 18 per cent in real terms) between 2013 and 2014.
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