An FRBG survey revealed the average farm turnover for 2006-07 was pounds 312,600, yielding an average net profit of pounds 46,300.
The FRBG said the average farm balance sheet showed a considerable improvement, with net assets rising, but profits are still not at a level where earnings can be retained, so the increase in balance sheet values reflects continued investment in farm businesses, both from farming sources - such as the sale of surplus land and buildings - as well as non-farming earnings.
Average net trading profits are now just over pounds 40,000, less than the average subsidy income of almost pounds 46,000, according to the FRBG. This is proving an unhealthy situation for the long-term sustainability of farm businesses, as future subsidy levels will decline as part of EU policy.
All this points to the continuing need to develop alternative incomes to traditional family farming, says the FRBG, with the vast majority of accountants (88%) reporting that their farming clients were looking at diversification.
chairman Jonathan Tippett said: "Dr Edwards has painted the picture of a dynamic future for agriculture and land use which will provide exciting opportunities for young people to develop rural businesses in tune with the needs and thinking of the 21st Century."
Robert Wharton, the FRBG
's regional spokesman, and farming partner at Dodd & Co, Carlisle, said: "Our survey confirms that more farmers are moving away from traditional farming to seek alternative enterprises to boost profits."
Andrew Ayre, the FRBG's North-East spokesman, said: "Support payments typically represent around a third of a farming business's income, often making the difference between viability or not in many cases.
Farm rents are traditionally paid shortly before receipt of the autumn subsidy and those used to getting sheep annual payments to cover this, may find themselves in additional difficulty this year, warns the FRBG. Meanwhile, finance agreements for capital machinery will still need to be serviced during the period.
This was the highest in the country and compared to just 29pc nationally who felt the proposals would have a negative impact, according to the FRBG
's annual farm profits survey.
Farms in the North also showed the biggest annual growth in turnover ( up 24pc to pounds 275,453 ( although this remained below the national average of pounds 296,269 (up 11pc), according to the FRBG research.
Andrew Ayre, the FRBG's North-East representative, said: "Although the percentage rise in profits looks impressive, we must bear in mind that we are starting from a fairly low base.
is represented in Cumbria by Robert Wharton of Dodd & Co, but would also like to have someone from Northumberland, Tyne & Wear, County Durham or Tees Valley.