Agriculture and forestry are no longer the cornerstones of the Scottish rural economy, according to a major review of the crofting counties of Scotland.

The report, prepared by the Macaulay Institute for the Committee of Inquiry on Crofting, shows that within the Highlands and Islands, a high proportion of farm incomes come from subsidy, and that off-farm incomes – where household members have jobs in other sectors -have become very important to the continued financial viability of farm and crofting households.

On many crofts, the average annual income from agriculture is much less than £10,000, the majority of which comes from agricultural support. For most farms and crofts, non-agricultural sources now make up the majority of household incomes. In the Western Isles, for instance, they account for as much as 84%.

Lead author, Dr Richard Birnie, said: “Our review shows that agriculture and forestry are no longer the cornerstones of the rural economy in terms of employment. In most areas there is in-migration and the local economy is doing well because of wider demographics and ?lifestyle? choices with people relocating to high amenity areas

“In these areas, employment in tourism and the public sector are now up to ten times higher than in agriculture or forestry.”

The crofting counties refer to the former counties of Argyll, Caithness, Inverness, Orkney, Ross and Cromarty, Shetland and Sutherland. There are currently in excess of 17,000 crofts in Scotland.

There has been a population growth higher than the national average across the crofting counties since 2001 and an associated rapid increase in average house prices in all areas except Caithness and Sutherland, and the Outer Hebrides.

The link between housing and crofting was also a key land use issue, particularly in terms of land supply for new housing, said Dr Birnie.

“Housing, and the supply of land for housing, are big issues in most areas. The majority of these changes are disconnected from the agricultural economy, but they benefit farming and crofting households by providing a diversity of opportunities for off-farm incomes. This income diversification provides a buffer to change in agriculture.”

Recent changes in European farm subsidy payments and poor trading conditions, particularly for store lambs, has meant that in some areas – such as Argyll – there has been very significant reductions in sheep numbers.

Dr Birnie said: “Although agriculture may be relatively unimportant from an economic perspective in many areas of the crofting counties, it is still the main means of landscape management. Much of the tourist industry is founded on the quality of the landscape: so will these rapid changes in agricultural land use have a significant knock-on effect on other sectors of the economy? What will happen if farming stops, and alternatively, what are the big new opportunities for agriculture in these areas, such as carbon farming?”

The report suggests several opportunities within the crofting counties to further enhance their rural economies through new land use initiatives. These include the development of localised food production and quality niche food products, as well as exploiting renewable energy sources.

“It is recognised that potentially these rich renewable energy resources can move many parts of the crofting counties away from fuel poverty, and provide a critical opportunity to create more sustainable communities for the future,” said Dr Birnie.

Professor Mark Shucksmith, Chair of the Committee of Inquiry into Crofting, welcomed this report: “It is important that our Vision for the future of crofting and our recommendations are based on sound evidence. This report from the Macaulay Institute will be invaluable to our Committee, both in providing us with evidence of trends in land use, and their environmental consequences, and in highlighting where evidence is unavailable.”

The Macaulay Institute is the premier land use research institute in the UK. Two hundred and seventy staff are based at the Macaulay Institute at Craigiebuckler in Aberdeen. The Macaulay Institute aims to be an international leader in research on the use of rural land resources for the benefit of people and the environment and is involved in research across the globe; from Scotland to Chile and China. More about the Macaulay Institute can be found at www.macaulay.ac.uk

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For further information contact:

Joanna Mennie

Tricker PR

9 Victoria Street

Aberdeen

AB10 1XB

Tel: 01224 646491

Email: jmennie@trickerpr.com

Interviews with Dr Richard Birnie can be arranged by contacting

1. The report “Trends, patterns and the environmental consequences of land use across the crofting counties” is available from the Crofting Inquiry website, http://croftinginquiry.org
2. “Land use” includes land usage for agriculture, forestry, and nature conservation, and a range of other purposes (e.g. recreational services, energy production). Any contemporary definition of “land use” should include both production and consumption activities. Therefore, this review attempts to provide an analysis of land use trends beyond those of just agriculture and forestry.
3. In most areas of the crofting counties, employment in the primary sector is about twice the Scottish average. Employment in other sectors such as ‘Distribution, Hotels and Restaurants’, and ‘Public Administration Education and Health’, is however ten times more important in numerical terms. This suggests that the primary sector is now far less important to the regional financial economy than it once was. However, the primary sector is still the major contributor to the environmental economy of the region (in terms of delivery of public goods and services related to landscape and habitat management) principally through agriculture and forestry. It also supports other industries like tourism in an indirect way.
4. Between 2001-2006 there was an 18% reduction in ewe numbers which accounted for 86% of the overall Scottish decline and was most concentrated in Shetland, Western Isles, NW Highlands, Skye & Lochalsh. Some of the large farms and estates in the NW Highlands de-stocked completely during this period
5. A recent survey of the Scottish LFA has shown that, in most areas, income from non-agricultural sources represents a high proportion of their total household income. This is especially so in the Western Isles where it is around 84%.