Other aspects of farm profitability

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 £1.88 million in 2023-24, a decrease of 2% compared to the previous year. 

It is estimated that around 66% of commercial farms (around 6,500 farms) had a net worth of over £1 million, 34% (around 3,400 farms) had a net worth over £2 million, and 19% (around 1,900 farms) had a net worth over £3 million in 2023-24. These results are based on net worth of farms in the survey, which represents around 10,300 farms in Scotland. In 2023-24 this is around 23% of all farms included in the 2023 June Agricultural Census. As the survey does not cover the whole industry, we cannot say how many more farms might be worth over £1 million.

The average debt ratio was 10.5% in 2023-24, a decrease of 0.7 percentage points  from 2023-24, and the lowest value since 2014-15. 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 £14,200 from off-farm income in 2023-24, a decrease of 7% 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. In 2023-24, 45% of farms could afford to pay the MAW, down from 60% reported in the previous year. Minimum agricultural wage is the weighted average over the calendar year, accounting for rate change at the start of the financial year. In 2023, MAW is estimated at 10.19 per hour.

Figure 11: Other aspects of farm profitability, 2022-23 and 2023‑24. 2023-24 prices