M4te1.174; Fi tirgy:CDATION OF AGRICULTURAtcEcoNom ICS SEP • HILL AND UPLAND FARMING IN THE NORTH OF ENGLAND S. ROBSON and D. C. JOHNSON Agricultural Enterprise Studies in England and Wales Economic Report No. 54 MAY 1977 — Price f1-50 UNIVERSITY OF NEWCASTLE UPON TYNE DEPARTMENT OF AGRICULTURAL ECONOMICS HILL AND UPLAND FARMING IN THE NORTH OF ENGLAND. 1973/74 and 1974/75. A two year review_ of financial and other results for an identical sample of 53 farms in the Hills and Uplands of Northern England, with results 'relating to the main enterprises on the farms. - The review also includes a comparison of certain data for the years 1973/74 to 1975//6. AGRICULTURAL ENTERPRISE STUDIES IN ENGLAND AND WALES. University Departments of Agricultural Economics in England and Wales have for many years undertaken economic studies of crop and livestock enterprises, receiving financial and techr4cal support for this work from the Ministry of Agriculture, Fisheries and Food. •The departments in different regions of the country conduct joint studies into those enterprises in which they have a particular interest. This community of interest is recognised by issuing enterprise reports prepared and published by individual departments in a common series entitled "Agricultural Enterprise Studies". Titles of recent publications in this series and the addresses of the Univprsity Departments are given at the end of this report. ACKNOWLEDGEMENTS. This report is based on financial and other data made available to the Agricultural Economics Department of the University of Newcastle upon Tyne by farmers who co-operated in the Farm Management Survey. The department takes this opportunity of thanking these _farmers for their willing co-operation and for providing the additional information required for the report. Grateful acknowledgement is also made to various colleagues wilo assisted in the collection and analysis of the data and to Mr. A.W. Tansey who edited the report. CONTENTS. CHAPTER Page. Introduction. 1. 11 Physical Data. 4. The Sample. 4. Land Use and Levels of Stocking. 5. Land Use and Stocking Data - Acreage Size Groups. 7. III Financial Results. 9. Hill Farms and Upland Farms. 9. Hill and Upland Farms - Acreage Size Groups. 11. Dairy & Sheep Farms. 11. IV Enterprise Results. 13. Beef Breeding Herd. 13. Beef Breeding Herd - Herd Size Groups. 14. Beef Breeding Herd - Comparison of Results 15. for 1968/69-1969/10 and 1973/14-1974/15. Other Beef Cattle. 16. The Sheep Enterprise. 17. The Sheep Enterprise - Flock Size Groups. 21. Dairy Herd and Other Cattle. 22. Comparison of Enterprise Results. 23. Comparison of Results - 1973/14 to 1975//6. 24. APPUDIX Accounting Methods and Definitions. 27. 11 Results for the University of Leeds Sample Farms. 30. III Direct Government Support to Hill and Upland Farming. 33. Note: Extended analyses of output, costs of production and other supplementary data relating to the three groups of farms and the main enterprises are published separately. Copies are available on request free .of charge. Other Publications in this Series. 34. Addresses of University Departments. 37. CHAPTER I. INTRODUCTION® An important part of the Farm Management Survey conducted by the Agricultural Economics Department of the University of Newcastle upon Tyne is the investigation of the profitability of hill and upland farming. Of the total number of farms taking part in the survey about 35 per cent may be classified as hill or upland. At the present time studies relating to the hills and upland are of particular relevance in the context of the European Economic Community's "less favoured areas"® A previous study carried out in conjunction with the University College of Wales, under an enterprise study programme, covered hill and upland beef and sheep production over the years 1968A9 and 1969/70. Although this study assessed the costs and returns of these enterprises, they were not necessarily determined together on the same farm and this precluded any reconciliation with net income on the farm. A new approach was made in setting up the present study, in that it was conducted within the framework of the Farm Management Survey relating_ to the 1973/14 and 1974/15 years® This procedure has many advantages, perhaps the most important of which is one of containing cost, a separate recruiting programme being unnecessary® The apparent non-randomness of the current sample might give rise to some criticism but, since the Farm Management Survey does contain some degrae of random selection, it is felt that the composition of the sample does not detract from the usefulness of the results. The fact that the separate results for the cattle and sheep, together with assessment of other input and output, could be reconciled with the whole farm trading results was considered a desirable factor outweighing possible disadvantages® The present study was conducted in conjunction with the Agricultural Economics Department of the University College of Wales, who will report on the results for their region. Initially the North of England was represented by the Agricultural Economics Departments of the Universities of Leeds, Manchester and Newcastle, with the latter acting as co-ordinator® , However, results* for the Yorkshire area were available only for the first year of the study, and Manchester's contribution to the sample.was very small. This report is therefore restricted to the area covered by the University of Newcastle upon Tyne, where there was a better sample distribution. Although the regions (Wales and the North of England) are reported upon separately, a general presentation format was agreed which enables certain comparisons between regions to be made. Co-operators will receive copies of the reports and others may obtain copies from the appropriate department. See Appendix 11. 1. The North of England may be defined as the counties of Cumbria, Northumberland and Durham. This area contains the northern end of the Pennine moors and hills, the mountains and hills of the Lake District and the southern end of the Cheviot hills. In the region there are about 1,143,000 acres of rough and common grazings which amount to 38 per cent of the total of this type of grazing in England and 40 per cent of the total acreage of this Northern area. Although the definition of rough and common grazngs is not precise, because a certain amount may be in lowland areas and not all high lying, it can be accepted that the majority is situated in the hill and upland areas of the region.. In this report a distinction between "hill" and "upland" is made using certain criteria.** There is in fact no clearly definable line at which "lowland" becomes ''upland" and "upland" becomes "hill". Altitude alone is not a reliable criterion. In general, lowland describes the area where most crops can be grown and harvested with comparative ease while upland may be taken as the intermediate zone between this area and hill land proper where cropping and intensive livestock production is uneconomic. The proportion of upland to hill land varies in different areas. For example in the Lakeland hills and the western Pennines the upland area is relatively narrow but on the eastern slopes of the Pennines it is wider and more extensive. In some areas there are river valleys with fertile and sheltered bottom land farmed in conjunction with the surrounding moorland,while in other areas the entire farms lie on high plateus with relatively little variation in altitude. In general, geographical situation, altitude, climatic conditions, soil and natural vegetation dictate the system of farming. Although in lower lying areas dairying may be important, land lying at higher elevations is normally best suited to grazing livestock for store raising. Even where dairying occurs, it is often associated with store cattle production and maintenance of sheep on the surrounding fells and allotments. Beef cattle and sheep are very significant in the agricultural economy of these areas. In the Northern region there were approximately 1,426,000 breeding ewes in 1974, of which 67 per cent were eligible for hill sheep subsidy. These constitute an important part of the sheep industry, being the primary link in the loeeding chain to the lowlands and providing the lowlands with lambs to fatten. Of the total breeding cow herd in the North of England in 1974, 45 per cent were classified as beef cows, and of these 57 per cent were eligible for hill cow subsidy. This demonstrates the importance of the hills and uplands in providing store animals for finishing on the more fertile lowlands and a basic source of hardy breeds for crossing. ** See Appendix I. 2. From the total of government support to agriculture, data .for the North of England (as defined previously) are not separately available. However, this region received in 1974 about 23 per cent of the total hill cattle and sheep subsidies for England and Wales. Reference to the "Annual Review of Agriculture" provides an indication of the importance of government support in the United Kingdom. Support in "special areas"* rose from £34.3 million in 1971//2 to £72.6 million in 1974/15, and accounted for 10.6 per cent and 24.6 per cent of total support respectively for these two years. In 1974/15 an additional hill cow subsidy was paid to cushion the effect of the substantial increase in feedingstuff prices towards the end of 1973 and the dramatic fall in store prices in the autumn of 1974. Without this additional payment the proportion of support tp these "special areas" would have amounted to 18.6 per cent of total support, and would have been 62.5 per cent above the level paid in 1971/12. It is recognised that other livestock sectors may benefit from this support through price levels in store markets.