Farm incomes can be devastated by the weather

The study by accountancy firm Deloitte found farmers are expected to earn an average of �84 per hectare, compared with �200 in 2003-04.

But earnings from non-farming activities are rising, it said.

The main factors behind the "dramatic swings" in income were poor summer weather and world market conditions.

The report predicted the amount farmers earn from food production will become increasingly unpredictable, while returns on non-farming land uses look set to continue rising gently.

The professional can still make a good living Mark Hill, Deloitte Washout 'worse than foot-and-mouth'

Mark Hill, head of the Deloitte Food & Agriculture Group said: "For a 400 hectare farm, this means net farm income over three years will have swung from �17,000 to �80,000 and back to �33,600."

Deloitte food and agriculture partner Richard Crane said 2003-04 was probably the first time in five years many farms had made money from growing food.

Income from non-food production, such as tourism and property letting, has risen by �35 per hectare, according to the 2004 results.

The study also forecasts a steady income for farmers from tax-backed environmental schemes.

The Deloitte Farm Results survey analysed the accounts of farms that represent around 100,000 hectares of lowland England.

Rotting crops

Its forecast for the rest of 2004-05 takes account of a "very difficult" 2004 grain harvest and low prices.

This summer only about half the wheat in the country was harvested and entire fields of crops were left to rot because of prolonged heavy rainfall.

The report also said continued price pressure in the dairy industry would lead to another year of poor returns for milk producers.

BBC rural affairs correspondent Tom Heap said many farmers may decide the crop and livestock income is "too dodgy" and stop farming altogether.

Mr Hill added: "The professional can still make a good living. Our top farmers can expect to generate net farm more than twice the average.

"This level of return should be sufficient to invest in the continued development of the industry."