Agriculture is now the one of the most stable sectors in the North West, highlighting the turnaround in fortunes of the farming industry in recent years, according to figures produced by the insolvency trade body R3.
The figures show that just 18 per cent of farming businesses in the region are considered to have a high risk of failure in the next 12 months – the lowest proportion of any of the main industry sectors.
The percentage of businesses at risk in agriculture is less than half that of the pub trade, which is one of the most distressed sectors in the region with 39 per cent of businesses with a higher than normal level of risk.
The North West figures reflect the picture in the UK as a whole, with agriculture the most stable of the main industry sectors although nationally the number of ‘at risk’ agricultural businesses was slightly lower at 16 per cent.
The figures, compiled using Bureau van Dijk’s Fame Database of company information, support evidence in a recent paper by the NFU which states that prospects for agriculture have undergone a dramatic turnaround in recent years.
A recent report by DEFRA also shows that total income from farming in the UK during 2013 increased by 13% to £5.5 billion in real terms. The figure is now more than two and a half times higher (160%) than it was in 2000, although it is still 26% less than the peak of 1995.
Richard Wolff, North West chair of R3 and Head of Corporate Recovery and Insolvency at JMW Solicitors, said that agriculture had held up well during the recession.
“Agriculture has had a relatively strong decade, particularly in the UK,” said Richard. “As agricultural commodities are traded internationally in US dollars, the devaluation of sterling during and after the recession has helped. Farm incomes have also benefitted from a real terms rise in the price of food in recent years following decades of falling prices.
“While farmers still have many challenges to deal with, including supermarket price wars, the effects of flooding and climate change and reform of the Common Agricultural Policy, there is also a renewed confidence in the industry. There is a growing interest in exporting to emerging markets and growing enthusiasm amongst consumers for buying organic and locally produced food.”