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Outlook bright but fears remain of hidden problems

UK - With the exception of dairying, prospects for UK farming look brighter than they have done for more than a decade - at least on the surface - Anderson, the farm business consultant, says in its latest Outlook review just published.

But this might be masking a raft of economic ills as farmers continue to "raid the balance sheet" to cover the fact drawings from the businesses were higher than the profits created in seven out of the past ten years.

In the long term, this is not sustainable and the industry will have to continue - and even accelerate - its restructuring so that resources are used by those with the skills and drive to prosper, says the report.

The consultant reckons that improved commodity prices over the past year will persist into 2007, resulting in total income from farming rising from just over £2.5 billion in the 2005 calendar year to approaching £3bn next year.

But Francis Mordaunt, head of business research, predicts there might be a "big shakeout" in the years to follow.

Source: The Scotsman

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