While the general economic climate, with factors such as rising fuel prices, is affecting many in the sector, Geoff Tomlinson, head of Rural Business at Napthens, is reporting improvements in milk prices and agricultural land values.

Mr Tomlinson reports that many in the sector are diversifying by carrying out contract work, or working for larger farms, and there has also been a marked growth in hobby farmers – those with a small plot of land to breed a few animals, or plant a small crop of vegetables – as the cost of buying food in supermarkets increases.

Another trend is the increasing number of ‘lifestyle’ farmers. Typically, these might be people who have succeeded previously in another business and who buy a farm for the change in lifestyle, or perhaps because they enjoy country pursuits such as shooting, or simply want a big house in the country.

Geoff said: “While inputs – the cost of running a business, such as fuel and fertilizer costs – are increasing for all those in the sector, there are several positive signs that we are moving into a period of improved economic growth.

“Milk prices are up, which is benefiting farmers, but obviously the associated costs of running a business are also increasing. The situation may not be as rosy as we were hoping for three or four months ago, but it is certainly not all doom and gloom.

“As during the foot and mouth crisis, many farmers are supplementing their incomes by diversifying. Some are working for other, larger farms, or carrying out more contract work.

“We are also finding that many farmers traditionally in the second category of rural business – the medium size businesses as opposed to small or larger operations – are actually growing and moving into the top category. Accordingly, many in the lower category are also moving into the middle so there are positive signs that there is still money to be made in the sector.

“This is a totally different situation to a year ago, and I have seen plenty of instances where farmers who had land worth, for instance, £4,000 an acre, are now sitting on £6,000 or £7,000 an acre.”