Capital Investment – 2023 Farmer Intentions Survey Briefing Note

Key Findings:

• Capital investment in farm businesses was positively related to farm turnover and profit.

• Investment was also related to socio- economic factors, notably age and whether a successor was identified, with younger farmers and those planning for succession more likely to report having increased investment.

• The proportion of farmers who reported having increased investment was above average in traditionally strong agricultural regions, Lothian, Fife, Scottish Borders and North- East Scotland, and below average in Shetland, Na h-Eileanan an lar, and among respondents who identified as crofters.

• Changes in investment were also associated with the reported influence of external market, political and regulatory factors (prices for fertiliser; feed; energy; commodities; labour availability; land availability; subsidies; regulations; and EU- exit). Those reporting that their business had been significantly impacted by changes in external factors were more likely to report a change in investment, either an increase or a decrease.

Takeaways:

• Associations between investment, age and succession status highlight the importance of farm family life-cycle factors to future investment. Providing support for succession planning could help to increase investment.

• Lower reported investment among islands respondents likely reflects constraints within these communities, identified by prior research

• The variable (positive and negative) response of farmers investment to changes in external factors requires further investigation.