North West agricultural industry would be operating at huge loss without government funding

The North West farming industry would have been operating at a huge loss last year without government subsidies, estimates from Defra suggest.

The region received £214million in direct payments – which are government subsidies paid to farmers to support the agricultural industry – while it made just £168m in income, a deficit of £46m.

The data also showed that direct payments have been higher than profits in five of the last ten years, including each of the last three.

Of the eight regions the only other region to be operating at a loss without direct payments in 2020 was the North East according to the annual report.

David Hall NFU North West Regional Director said: “Despite the region being the home of major cities such as Manchester and Liverpool, which have world renowned reputations for heavy industry and commerce, our 12,815 farming and growing businesses in the North West quietly go about their business collectively producing a wealth of food commodities and contributing more than £726m to the economy.”

Nonetheless, data revealed the North West has the second-lowest total income from farming in England – making up just 6.5% of national profits – and is also second-lowest in terms of the total income per hectare at £178m.

Total Income From Farming for regions in England

This figure is significantly lower than the average income per hectare for the whole country, which sits at £285m.

The most profitable region in England per hectare was the West Midlands – which had profits of £361m per hectare – while the North East was the least profitable at £169m per hectare.

The West Midlands tops the income charts despite having fewer hectares of farmed land, with the North West boasting over 7,000 more hectares.

Total Income From Farming per hectare for regions in England

Despite the financial deficit, the report showed the North West is still important to England’s agricultural industry, as it accounts for 25% of profits from dairy production and 16% of profits from beef and sheep production in the country.

The region is the second-largest producer of each, ranking behind the South West for each category.

Incomes from dairy, beef and sheep products for regions in England

Hall said: “When it comes to food production in the United Kingdom, a staggering 15% of the industry is based in the North West.

“[Farmers in the North West] are world leaders in food safety, animal welfare, traceability, and environmental enhancement, with these values reflected through our annual food and drink export value of £2 billion.”

However, where the North West falls behind the rest of England monetarily is its crop output.

The region had a gross output of £261 million from crops in 2020, which was the second-lowest of any region – only higher than the North East.

In comparison, the East of England had a gross output of over £1.8 billion in the same period.

Income from crops for regions in England. Crops include combinables and sugar beet, alongside vegetables, horticulture and potatoes.

Defra explained this vast disparity by stating that the North West’s cold, wet climate and upland areas made it difficult to grow crops of any kind.

In comparison, the East of England has a much drier climate with more fertile soils which make it ideal for cropping.

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