The survey was first conducted in 1996, the year when the BSE crisis hit the industry hard, and has always proved an accurate barometer of the real feeling of the industry.

Professor Donald MacRae, chief economist for the bank, said: "To some extent I am surprised by the level of optimism, but farmers tend to be adaptable and are now showing a remarkable willingness to adjust to changing circumstances, especially in view of the reforms of the Common Agricultural Policy. It is quite clear that the vast majority are planning to make changes in their business operations, but the overall view is decidedly positive."

The responses were made in November on an anonymous basis. The core findings are distinctly at odds with the prophets of doom who claimed that reform of the CAP would result in a considerable downsizing of Scottish agriculture.

Profitability has been hard to achieve in recent years, but 76 per cent of the respondents said they were in the black in their most recent accounts and most reported that the surplus exceeded personal drawings.

The dairy sector is the most troubled. A large number of producers, mostly those in the older generation bracket, are, according to MacRae, close to "tipping point". Any further decline in milk prices could well prompt a considerable exodus.

Source: The Scotsman