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Oilseed rape incomes tumble.

Oilseed rape incomes have fallen by over pounds 400 per hectare, according to a new survey published by Newcastle University.

The report published by the Farm Business Survey at the university has examined the economics of oilseed rape production in England.

Commissioned by Defra, the analysis is based on a sample of over 200 farms in 2003/04 and follows a similar study undertaken 10 years ago.

The total area sown to oilseed rape in the UK has now grown to around 600,000 hectares, and the share of domestic production in total supply (self- sufficiency) has risen to over 100%, making the UK a net exporter.

The 2003/04 growing season was not a good one for oilseed rape, which goes some way to explaining the poor financial performance recorded on most farms.

But the study shows that the price received by farmers has fallen dramatically over the last 30 years, even though it has been compensated somewhat by the area payment following changes to the Common Agricultural Policy.

For the more popular winter sown crop, the value of oilseed rape output in 2003/04 averaged pounds 708 per hectare, of which pounds 235, or 33%, was the area payment.

The average net margin was just pounds 75 per hectare, including agri-environment scheme payments.

This compares with a net margin in 1996 of pounds 476 per hectare.

For the spring sown crop, the average financial performance was worse, with a negative net margin of -pounds 51 per hectare, compared to pounds 304 10 years ago.

Farms in the North generally fared better than those in other parts of the country, primarily because of higher yields.

Moreover, younger farm managers and those with a college education tended to out-perform their peers.

Results from the survey also suggest that any economies of size (ie lower unit costs of production on larger enterprises) are quickly exhausted at fairly low levels of output, around 75 tonnes, or 25 hectares.

The report provides details on these summary findings, as well as results on seeding rates, the use of fertilisers and other chemicals, different methods of marketing the crop, and reasons for farmers choosing to grow oilseed rape.
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Publication:The Journal (Newcastle, England)
Date:Jun 2, 2006
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