FARMERS have expressed their concerns after seeing profits fall by up to two-thirds in the past year.

Research by the University of Reading Agriculture and Food Investigation Team (Afit) suggests average profitability fell by 64 per cent, from £15,242 to £5,521, per farm between the financial years 2003/2004 and 2004/2005.

Local farmers have said the findings are likely to be reflected in the North-East.

Rising costs - including a 17 per cent increase in the price of fuel - were the biggest factor behind the fall in profits.

David Maughan, a farmer at Morton Tinmouth, near Staindrop, County Durham, and vice-chairman of the North-East Livestock board, said the figures were a worry for farmers.

He said: "Reading University's surveys are very well respected and it is a concern.

"You do get some regional variation but, generally, the picture is remarkably similar across the country."

Of the 190 farms surveyed, 62 per cent had average annual losses of £16,225 and specialist producers were hardest hit.

The Annual Farm Business Survey, commissioned by the Department for Food and Rural Affairs said the total costs involved in running farm businesses rose by more than five per cent overall between the 2003 and 2004 harvests.

Seed was up 13 per cent, followed by fertiliser, up ten per cent, although rents remained at a similar level to the previous year.

Afit senior investigation officer John Wright said: "A large proportion of farms are failing to make any profit at all.

"The latest results show that 62 per cent of the farms in the whole sample fall into this category and, among the cattle and sheep farms, this figure rises to over 80 per cent."

Profitability is defined as total farm output minus all costs, other than salaried management.

The researchers then deducted salaries of between £15,000 and £25,000 per year for unpaid manual labour provided by farmers and their families.