Fewer than a third of farm businesses in the North-East would be profitable without support payments, according to a new survey.

The survey by land and property specialist GSC Grays found that 49 per cent of farmers do not think their business would be profitable without the Basic Payment, and a further 20 per cent were not sure whether they could turn a profit without it.

“It’s very concerning that nearly half of farmers don’t expect to make money without support payments, and one in five do not know what their bottom line looks like without subsidy,” said Guy Coggrave, managing director at GSC Grays.

However, there were some positive signs, with many respondents of the 150 farms surveyed - particularly young farmers – optimistic and determined to find opportunities amongst the current challenges.

A total of 61 per cent had considered expanding their businesses and 62 per cent had looked at taking on more land, though 66 per cent said land prices were unsustainable.

“There are also some straightforward steps which all producers can take to put their business on a surer footing, from simple budgeting and benchmarking to generating additional income through environmental schemes,” said Mr Coggrave.

Addressing the impact of Covid-19 on the sector, 34 per cent of farmers thought that the pandemic had a negative effect on their business.

Even so, 29 per cent of respondents (rising to 50 per cent amongst the 20-30 age group) thought the pandemic would bring opportunities, with direct sales and increased markets for local food being cited as potential areas of growth.

Interest in diversification was also high. Almost three quarters (72 per cent) of respondents were already engaged in some form of diversification, and of those who had not yet diversified 36 per cent would like to do so.

Perhaps buoyed by a summer of ‘staycations’, the most popular form of diversification being considered was a leisure or tourism enterprise.

“Our survey results show that farmers are acutely aware of the challenges ahead, but there is still an appetite for growth and pursuing new ventures,” said Mr Coggrave. “Our concern is that the immediate pressures of a poor harvest and cashflow issues are understandably taking priority over longer-term business planning: 52 per cent of farmers surveyed do not have a plan for retirement or succession.”

GSC Grays is now launching a campaign to work with farmers to secure their businesses for the future.

‘A Changing Landscape’ will launch in November 2020 and will provide advice and skills that will help rural businesses to understand the impact forthcoming changes will have and the steps farmers can take now to make sure their businesses continue to grow and thrive for many years to come.