Other aspects of farm profitability
Figure 11: Other aspects of farm profitability, 2020‑21 and 2021‑22
Assets and debt impact farm businesses. Net worth (assets minus debt) estimates the overall value of a business. The average farm was estimated to have a net worth of £1.59 million in 2021‑22, an increase of 11% compared to the previous year.
The average debt ratio was 12.2% in 2021‑22, a slight decrease from the 12.3% figure in 2020‑21. This indicates how much of the average business’s assets are financed by debt.
Farms may also earn income from off-farm jobs that do not contribute to farm business income. The average farm earned £14,000 from off-farm income in 2021‑22, an increase of 5% from the previous year.
Another way of looking at farm profitability is whether farm income is enough to pay unpaid labour the minimum agricultural wage (MAW, £8.86 per hour). In 2021‑22, 60% of farms could afford to pay the MAW. This increased from 50% of farms in the previous year.
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