SCOTGOV this week released figures indicating that Scotland's Total Income from Farming (TIFF) is estimated to have increased by £96 million in 2016, up to about £749 million, after two years of decline.

The chief statistician's TIFF estimates for Scotland between 2014 and 2016 contain near-final estimates of TIFF for 2015 and an initial estimate of 2016 TIFF. The figures show income fell by 16% in 2015 compared to the previous year, but initial estimates for 2016 suggest an increase of 15%.

Speaking about the figures, Rural economy secretary, Fergus Ewing said: “I welcome the increase in overall income from farming across Scotland in 2016. As the cornerstone of the rural economy, it is important that agriculture performs well.

“Of course, these figures show varying financial success from sector to sector and we can see that in some areas, exchange rate movements influence income levels for our hard working farmers.

“Historically, support payments from the EU have played a significant role in farm profits and the Total Income From Farming balance sheets show us that this is continues to be very much the case. Given the importance of these payments, the Scottish Government is pushing Westminster for further clarity on the future of rural funding.

“Profits are dependent on driving down output costs, and it is important farmers continue to do everything they can to improve efficiency. The Scottish Government is supporting the industry to do this through initiatives like the Beef Efficiency Scheme. Diversifying activity in rural communities is paying dividends too, and I would encourage farmers to consider the opportunities available through the likes of tourism, renewables and forestry.”

NFUS director of policy, Jonnie Hall said: “While TIFF is the headline national-level measure of farm income, drilling down on the figures shows worrying trends continuing for Scottish farm output in general and just how challenging 2015 and 2016 have been for those producing milk, cereals and eggs.

“One thing that does stand out is the impact of the exchange rate shift following the EU referendum last summer. That has been an important factor in helping beef and lamb prices to rally. However, support payments are also included in the calculation and here the impact of the exchange rate change has been stark and a big factor in TIFF increasing.

“Greater efficiency at farm level, and falling prices for some key inputs – feed, fuel, fertiliser – have helped farmers and crofters significantly reduce costs for the second year in a row, also contributing to the turnaround in TIFF.

“There is a clear indication of a contraction of Scottish agriculture, and that is further borne out by productivity indicators which suggest we have fewer farm businesses but they are getting more efficient in terms of input use. However, TIFF figures relate to all aspects of Scottish agriculture and these headline figures can disguise significant variations between sectors, farm sizes and farm types.

“The TIFF figures do, however, underline the importance of public support to the viability of Scottish agriculture. In the months ahead, we will be pressing at a Scottish and UK level the need for a post-Brexit agricultural policy that is both adequately funded and better targeted at active farmers and crofters in a way that encourages them to take their businesses forward.”