By Debbie James

MANY Welsh farms would struggle to survive without subsidies - but that could be the future they face post-Brexit.

Worrying new farm income figures for Wales point to the crucial role of the Basic Payment Scheme (BPS) in supporting agriculture.

For hill cattle and sheep farms, BPS income for 2015/16 was £189/ha but, after rent and finance charges were deducted, the average profit per hectare for these farms was just £152/ha.

It is a similar situation for hill sheep farms with the average profit at £167/ha and the BPS income at £165/ha; for lowland cattle and sheep farms the profit/ha was £187 and the subsidy £192/ha.

The incomes survey was conducted by Aberystwyth University and involved a random sample of 511 farms across Wales.

Survey director Tony O’Regan said farmers are often criticised for “crying wolf’’. But, he added: “It is difficult to see how many Welsh farms can currently produce food economically without relying on significant non-farming income and timely BPS payments.’’

The survey also revealed that stocking rate has a significant influence on the profitability of Welsh dairy farms.

For hill and upland dairy farms, the average stocking rate is 2.06 grazing livestock units per adjusted forage hectare but top performers stock their farms at 2.32.

The pattern was repeated on lowland dairy farms where the stocking rate on the top third was 2.39 and the average, 2.19.

The results highlighted significant differences between the ‘average’ and ‘top-third’ performing farms. For cattle and sheep farms, the profit per hectare for the top performers was more than double that of the average.

On dairy farms, producers in the top third made a net margin of more than six times that of the bottom third and meat producers showed similar variability, with lamb producers ranging from making 31p/kg to losing 82p/kg, and beef producers ranging from plus 28p/kg to minus £1.50/kg.

But none of these profit and loss figures take into account the cost of the farmer’s own labour so the true financial situation is more acute. “The dairy sector best illustrates this since labour and pension costs alone can add around 7-8p/litre, pushing top producers’ cost of production to over 26p/litre and the bottom closer to 33p/litre,’’ said Mr O’Regan.

The figures illustrate how milk contract variations influenced performance.

Businesses in the top third were paid 24.21p/litre while the bottom third received 21.43p/litre. The average price was 22.49p/litre.