Leading farmers co-operative Farmway has recorded a remarkable turnaround in its fortunes.

The Darlington-based operation has turned a £450,000 loss in 2000 into a £240,000 profit in 2001, one of the most difficult years for agriculture.

Chairman John Hutchinson said: "This is a much improved all round performance with the difficult decisions taken by the board and management in recent years beginning to bear fruit.

"foot and Mouth made 2001 one of the worst years in living memory for farming and its associated industries.

"But despite this pestilence and the inevitable consequences of the prolonged adverse weather, we have maintained turnover in our core business and reduced operating costs and bank borrowings."

Farmway's turnover was identical to 2000 at £22m. Around £90,000 will be paid out to members from profits, with £150,000 being transferred to reserves.

Farmway is continuing to invest for the future benefit of its members.

Of a total capital investment programme for the current year of £600,000, around £160,000 has been earmarked for the Piercebridge Grain Silo.

Further funds are also being allocated to the re-siting of the group's head office in King Street, Darlington to a site in Piercebridge.

The co-operative is also continuing to refurbish its nine Countryware stores, but it has decided to withdraw from the farm machinery business and has wound up the division. Looking ahead, Mr Hutchinson said: "Agriculture is entering a period of even greater uncertainty.

"The effects of Foot and Mouth Disease will linger for several years and will have changed the life styles of many of our members and customers permanently. "The present year will be another challenging one for Farmway, but we are now in a much more sustainable position.

"we are anxious to see the business move forward and grow following a period of necessary consolidation."