A report from Deloitte Touche published last week claims 'there is scope for cautious optimism' in the farming industry saying farmers and growers have three options to 'grow, get together or get out'.

According to the survey, the national average profit for a 500 acre family farm has fallen from a high of £80,000 in 1995-96 to £2,500 this year. The survey is the largest of its kind and examines Deloitte Touche's farming client accounts for financial years ending up to June 2001. It covers more than 250,000acres of lowland rural business.

'Having tracked the downturn for six years, we believe that farming is at the bottom of the cycle,' said Mark Hill, leader of the firm's food and agricultural team. 'FarmersShave trimmed their costs even harder than we predicted last year. Overhead costs have fallen by 10 per cent since 1996, but this is not sufficient to combat the 30 per cent fall in farm-gate prices over the same period.

The options to grow, get together or get out would see producers expanding the scale of their business, or collaborating to achieve production efficiency or for those not able to change, to leave the sector altogether.

Hill urges the sector to embrace change, negotiate new arrangements to cut costs and reduce risk, to drive out inefficiency, to understand the market and forge alliances to meet its demands, to revive passion about farming, and to engage the best staff and advisers on value and not price.

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