Total income from farming (TIFF) is likely to fall from the current UK level of about £5 billion to between £2bn and £4bn by 2027.
The magnitude of the drop will depend on the eventual Brexit deal, but Michael Haverty, researcher at the Andersons Centre, Melton Mowbray, said a free trade deal similar to those the EU already had with Canada and South Korea, was the most likely.
Speaking at an Andersons’s seminar in Perth, Mr Haverty said: “Given Theresa May’s red lines, these seem the only deals which are possible. To move further would mean a ‘no deal’ scenario.
“However, even a ‘Canada plus’ deal does not sit comfortably with commitments the UK Government and the EU agreed in December regarding full regulatory alignment. Accordingly something will have to give.”
Mr Haverty thought it was unlikely farmers would simply sit back and accept lower returns for the same amount of work.
He said: “Some sectors of agriculture are likely to do quite well and this might encourage people into these sectors.
“Other sectors might become trickier in terms of farm profitability, so the number of farmers might be expected to decline.”
Previous experience showed when income changed, capital expenditure also changed, and this could be expected as a reaction to Brexit shocks.