Livestock farms are more reliant on support payments
Support payments play an important role in farm income. Around 82% of all farms made a profit in 2021‑22. Without support this would decrease to 44% of all farms.
The importance of support payments varies by farm type. With support there is less variation in the proportion of farms that break even (have income greater than zero). Without support far fewer livestock farms make any profit, especially those in less favoured areas.
Despite the increase in average income, the proportion of farms which were profitable with support payments increased only slightly, from 81% in 2020‑21 to 82%.
There were larger increases in the proportion of farms which were profitable without support payments. The proportion of cereal farms which were profitable without support payments increased by 22 percentage points. There was a 16 percentage point increase for dairy farms. The proportion of all farms which were profitable without support payments increased from 36% to 44%.
Figure 8: Proportions of farms which are profitable, by farm type, in 2021‑22
LFA land is low quality and often very hilly, mostly found in very remote areas. There is less opportunity to do anything else with the land which makes it difficult to do any other activities.
Support payments are a key source of revenue for a large number of LFA farms. Current support payments are intended to allow farms to remain in business and be an active part of their local community.
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