Resources in Agriculture: Capital and Finance

In Chapter 5 we saw that British agriculture uses a little less land as the years go by and much less labour but manages to produce a rising volume of output. A major part of the explanation for this is the increasing amount of machinery, equipment, buildings, drainage and other land improvements which farmers employ. Because of these changes agriculture is said to be an increasingly capital-intensive industry. In this chapter we examine what such a statement means and the evidence behind it. And because part of this additional capital has been acquired using funds borrowed from outside the farm business, it is convenient in this chapter to review the financial position of UK agriculture.