One in four farming families are living below the poverty line, according to a study by the Commission for Rural Communities.
A quarter of farming households receive relatively little support, either from agricultural policies or the welfare state, it said.
Commission chairman Stuart Burgess said: “While many farming households have successfully increased production, resilience and farm incomes, one in four are living in poverty.
“A quarter of farming households have an income of less than £20,000, and in the majority of cases this derives from capitalising on the business assets rather than actual farm business profits.
“These struggling farms are likely to have grazing livestock and be located in upland areas. Many are left trapped in poverty without the resources or support to earn a living wage.”
For most farmers, the ability to diversify production and earn income off-farm was essential to subsidise their farming income, Dr Burgess said.
Overall nearly two out of three farms had some form of off-farm income. In 2008/09, the total income from diversified activities was £300 million.
A commission report, Poverty amongst farming households: achieving sustainable livelihoods, identifies the root causes of poverty.
While many farmers are highly entrepreneurial, others do not have the skills or opportunity to diversify into new businesses, it says. Tenant farmers can experience specific barriers to business development due to the fact that they do not own the land that they farm. They can find it difficult to access investment capital and difficult to embark on certain business activities due to restrictions in tenancy agreements.
Planning regulations can also be a barrier for those wanting to change the use of farm buildings to diversify their incomes, says the report.
“Because of business failure, retirement or ill health, some farmers have no choice but to leave farming,” said Dr Burgess. “However, inadequate pension provision and a lack of alternative affordable housing can make this difficult.
“Furthermore, the sale of assets to fund retirement can undermine the viability of a family farm for a successor.”
Farmers could also find it difficult to claim benefits, Dr Burgess added.
Tenant farmers may have difficulties accessing housing benefits because tenancy agreements may not separate rental costs for the farmhouse and the land.
“Tackling poverty amongst farming households is long overdue. The government should actively promote farm business support and the take-up of income-related benefits to eligible farming households.”
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