One in three Scots farmers is planning to make a major capital investment in their business over the next year, a new survey has found.
The survey, which was carried out by accountancy firm Johnston Carmichael, found that a third of farmers were seeking additional finance from their banks to support major investment plans.
Agricultural partner at the firm, Neil Steven, said the survey showed a “relatively upbeat mood” and resilience amongst farmers with only 23% of those surveyed saying they were downbeat about the next 12 months.
“While the degree of this planned investment will differ between agriculture businesses, it shows that many farmers have confidence about the long-term prospects of the sector,” added Mr Steven.
The survey also found that more than half – 56% – of the farmers surveyed had no succession plan in place, with 60% of those surveyed over the age of 50.
When asked to pinpoint the biggest single concern for their businesses, 54% cited selling prices, closely followed by input costs and Cap reform.
The survey also revealed that nearly four in five farmers – 79% – expected to receive a lower subsidy payment this year, while less than half – 43% – said they intended to apply for extra support under the Scottish Rural Development Programme.
Mr Steven said: “While our survey highlights that many believe there are opportunities within the agriculture sector, it also faces real challenges including a more volatile market place, a likely reduction in subsidy levels and a lower return from traditional farming activities.
“To help address these issues many farmers will need to review their business model to maximise existing revenue streams and consider new ones which could produce a better return on capital.”
Greater financial planning with budgets and projections could help enhance performance within the sector, he added.
Lastly, the survey found that the majority of farmers – 70% – were concerned the Scottish Government’s new powers to vary tax rates and band, which come into force in April next year, would have a negative impact on their businesses.
“Given that other key sectors, including food production, brewing and whisky, rely on a healthy farming industry, governments in London and Edinburgh should be mindful that they don’t impose extra burdens on farmers which could deter future generations from entering the industry,” said Mr Steven.