The cash flow crisis facing the agricultural industry in Wales is highlighted by the latest Welsh Government farm income forecasts predicting a decline in profitability across all the key farming sectors.
The figures, based on the latest Farm Business Survey results, show that average farm business income across all farm types is forecast to decrease by nearly £5,000 to £24,500 for the year to March 2016 - a drop of around 16 per cent.
For dairy farms, the average farm business income is forecast to fall by a massive 40 per cent, 4 per cent for cattle and sheep (LFA) farms and 8 per cent on cattle and sheep (lowland) holdings.
“Unfortunately, given the fall in farm gate prices we have seen for our milk, lamb and crops this past year it was inevitable we would see a drop in farm business income,” said NFU Cymru president, Stephen James.
“But these figures show just how dramatic that impact has been on farming businesses the length and breadth of Wales.
“Even more sobering is the fact that average net farm income is forecast to decline by a quarter to £13,000 for the 2015-2016 accounting period and starkly highlights the challenge the Welsh agricultural industry faces at this time.
“But this lack of cash is not just a worry for farmers. Rural businesses that rely on farmers for so much of their income are also suffering,” he added.
“The hope is that these figures will be a wakeup call to the rest of the supply chain that they must now work with farmers on a longer term relationship that delivers some certainty on pricing to give farmers the confidence that food production can be profitable.
“Clearly the Welsh Government also has a role to play and we are concerned at the threat of further costly regulation, particularly in the form of potential new Nitrate Vulnerable Zone regulations adding cost to many farming businesses.
“This may be the final straw for some, particularly in the dairy sector.
“Of immediate concern, too, is the delivery of CAP direct payments with over 10 per cent of farmers still waiting to receive their advance payment -- a matter that must be addressed as soon as possible.”