FARMERS must work on the basis that they are not going to make as much money as they have in the past.

Mr Mike Yeadon of Smiths Gore said they should all reduce expectations of the amount of income they can generate.

The arable farms he advises have all set a break-even price of £60-£65 a tonne. "If we can manage in these conditions without losing money, when prices do go up, we will at least reap some of the benefits from that break-even price," he said.

Last year the 11 farms he is involved with all realised they needed to make major changes. The strategy adopted was to see exactly where they were; decide where they wanted to go; what was necessary to get there, and what the end result would be.

Rapid expansion was not suitable for any of them and most decided it was best to stay as they were, with just a few changes such as to the crop rotation.

Mr Yeadon presented the profile of a survival business. It was one which had a high level of technical efficiency and a tendency towards high value crops such as potatoes and sugar beet grown to contract. It was a member of a buying group and had a well motivated labour force or contractor.

Labour and machinery costs were £90 an acre for combinable crops. Rent and interest charges were restricted to £50 an acre to provide a break even price of £60-£65 an acre.

Fifty per cent of profits cam from residential or commercial lets. Partners often had other sources of income.