Average farm incomes `fall by almost third' in North.

Byline: By Jennifer Mackenzie

Average net farm incomes throughout the North fell by almost a third last year, according to the University of Newcastle's annual farm business survey.

Farms surveyed in Northumberland, Cumbria, County Durham and Tyne and Wear had an average net farm income of pounds 106 a hectare, with incomes decreasing on average by 32pc, according to the report from the university's school of agriculture, food and rural development.

These averages include increases in NFI by the lowland arable farms (plus 50pc) and hill rearing groups (plus 53pc) and reductions of 1pc for marginal Disadvantaged Area holdings to -98pc for upland dairy units.

The 200 surveyed farms had year-ends December 31 2002 and April 30 2003. The survey is one of nine regional surveys with the information becoming part of the Farm Accountancy Data Network of the EU. Return on investment, measured as return on tenants' capital, fell on the previous year to an overall average of 2.3pc, lower than the prevailing bank rates.

Again it was the upland dairy group which saw a significant change in fortune to negative 8.3pc, with lowland dairy producers also seeing a marked reversal from 10pc the previous year to ( 2.3pc in 2002-2003.

Charles Scott, who manages the farm business survey unit which is part of the university's school of agriculture, food and rural development, said the survey's findings mirrored previous surveys but it was not all doom and gloom for the industry.

"It's a sad reflection on the industry ( a lot of farmers would be better off with their money in the bank," he said.

"At the moment there is a feeling of optimism with beef and sheep prices up and last year corn prices were pretty good.

"And if you take into account other elements associated with farming such as diversification and the whole raft of environmental schemes which a lot of farmers are picking up on, this is why people are staying in the business."

Mr Scott said that while some of the farmers in the survey group were making good money from mainstream farming, others were adding value to their products and taking advantage of government schemes, such as organic production and countryside stewardship. "The innovators who spot these changes are the ones who stay in business," he said.

Aside from the overall survey, special studies made included one commissioned by Defra on the use of computers and the internet on farms. As many as 52pc of farms taking part in the survey use computers to some extent for farm or related business use ( up 10pc on the previous year.

Of those with computers, the most common use is livestock record keeping (43pc of all farms) and farm management accounts (35pc of all farms) with both categories increased on the previous year.

The internet is widely used for e-mail and information gathering but is not commonly used for transactions.