Average farm incomes in Scotland have dropped by over 50%, highlighting the growing financial pressures faced by farmers and crofters.
The Scottish government's Farm Business Survey shows that average farm income has fallen to £35,500, the lowest level since 2019-2020.
Livestock producers have been hit hard, with incomes from lowland cattle and sheep farms plunging by 87%, and 68% of these farms now operating at a loss.
Additionally, over a third of cereal and milk producers have reported financial losses, according to the survey.
NFU Scotland President Andrew Connon said there needed to be fairer and sustained returns through supply chains, as well as a better support framework.
“This sharp decline isn’t just about economics – it's about the viability of farming businesses and the communities they support," he warned.
"For many, farm support is the only thing keeping the gates open. Without it, vital parts of our food system and rural economy simply wouldn’t survive.
"In addition, it’s alarming but not surprising to see the financials of the cereals and milk sectors given the subdued prices for cereals, not helped by continued grain imports, and huge disparity with milk contracts”.
Declines in cereal and milk prices led to significant income reductions for arable and dairy farms, the Scottish government's survey shows.
While average incomes for arable, dairy, and mixed farms remain the highest among all farm types, a larger proportion of these farms are now unprofitable compared to the previous year.
Livestock farms, which account for 60% of commercial farms in Scotland, continue to face losses in their agricultural activities on average.
Lowland cattle and sheep farm incomes dropped by 87%, the largest decrease among livestock farm types, primarily due to reduced livestock output.
The percentage of unprofitable lowland cattle and sheep farms rose to 68%, and the average income for Less Favoured Area (LFA) livestock farms fell by a third.
NFU Scotland slammed the recent UK government proposals on inheritance tax, warning it would "compound an already dire situation for family-run farms".
Mr Connon said the income figures should be a wake up call to government: "It must urgently reconsider proposals that could decimate generational family farms.
"These are not cash-rich businesses – they’re the backbone of food production and rural Scotland," he said.
