The universe of farms
The term "universe" is the statistical term used to define the set of units under observation. In the present context, the universe of farms is represented by the agricultural holdings surveyed by the Farm Structure Survey (FSS), carried out by the EU countries and managed by Eurostat. This set of farms consists of all agricultural holdings in the European Union of at least 1 hectare and those of less than 1 hectare provided the latter market a certain proportion of their output or produce more than a specified amount of output. However, Member States can use thresholds different than 1 hectare, as long as they follow the coverage requirements specified in Regulation (EC) No 1166/2008 of 19 November 2008 on farm structure surveys and the survey on production methods.
The field of observation consists of 'commercial' farms
In defining the FADN field of observation, the Commission follows the guidelines specified in Council Regulation (EC) No 1217/2009 of 30 November 2009 and subsequent amendments and adopts a pragmatic approach by including only those farms deemed to be commercial.
A commercial farm is defined as a farm which is large enough to provide a main activity for the farmer and a level of income sufficient to support his or her family. In practical terms, in order to be classified as commercial, a farm must exceed a minimum economic size. However, because of the different farm structures across the European Union, a different threshold is set for each Member State. Consequently, the set of farms which constitute the FADN field of observation in a given country is represented by those agricultural holdings surveyed by the FSS, with an economic size exceeding the threshold set for that country.
The economic size of farms
The economic size of farms is one of the criteria utilised to classify agricultural holdings according to the Community typology for agricultural holdings. Commission Regulation (EC) No 1242/2008 of 8 December 2008 has introduced substantial changes in the previous methodology to classify agricultural holdings, which was established by Commission Decision 85/377/EEC of 7 June 1985.
With Regulation (EC) No 1242/2008, the economic size of an agricultural holding is measured as the total Standard Output (SO) of the holding expressed in euro. Previously, using rules set by the Decision 85/377/EEC, the economic size was measured as the total Standard Gross Margin (SGM) of the holding expressed in European Size Unit (ESU) instead. The principle of both methods is the same: the sum of all the SO - or SGM - per hectare of crop and per head of livestock of each holding is a measure of its overall economic size. The main difference between the two concepts are the methodologies applied for calculations (since the SO excludes direct payments and, of course, costs) and units used to measure the economic size of the holding (the economic size based on the SO is expressed in euro and not in ESU, as in the SGM classification).
Regulation (EC) No 1242/2008 enters into force from the accounting year 2010. However, to allow time series analysis, data for the accounting years 2000 to 2009 have been recalculated following the new methodology. Therefore, two sets of FADN data will be made available for the accounting years 2000 to 2009, one based on the SO and the other based on the SGM (it allows a comparison between data of accounting years based on different methodologies).
The Standard Output (SO) is the average monetary value of the agricultural output at farm-gate price of each agricultural product (crop or livestock) in a given region. The SO is calculated by Member States per hectare or per head of livestock, by using basic data for a reference period of 5 successive years; for example, SO 2007 covers the calendar years 2005 to 2009, or the agricultural production years 2005/06 to 2009/2010 (the SO 2004 coefficients represent an exception as they were calculated using the average of only 3 years, 2003, 2004 and 2005). The SO of the holding is calculated as the sum of the SO of each agricultural product present in the holding multiplied by the relevant number of hectares or heads of livestock of the holding. The SO coefficients are expressed in euros and the economic size of the holding is measured as the total standard output of the holding expressed in Euros. Holdings may be classified in economic size classes, the limits of which are also expressed in euros.
The SO coefficients are calculated for more than 90 separate crop and livestock items. This large number of items not only reflects the diversity of agriculture within the European Union, but also indicates the level of detail that is required to ensure that the results of the FADN and of other surveys are comprehensive and reliable.
Standard Gross Margins
The Standard Gross Margin (SGM) is the average value of output minus certain specific costs of each agricultural product (crop or livestock) in a given region. To avoid bias caused by fluctuations, e.g. in production (due to bad weather) or in input/output prices, basic data for a reference period of 3 successive years are used by Member States for calculating the SMG coefficients. The SGM of the holding is calculated as the sum of the SGM of each agricultural product present in the holding multiplied by the relevant number of hectares or heads of livestock of the holding. While the SGM coefficients are expressed in euros, the economic size of the holding is expressed in terms of European Size Units (ESU). The value of one ESU is defined as a fixed number of EUR/ECU of Farm Standard Gross Margin. Over time the number of EUR/ECU per ESU has changed to reflect inflation.
| Year of SGM|| Value of 1 ESU in EUR/ECU|
Holdings may be classified in economic size classes, the limits of which are expressed in ESU.
Delimitation of the field of observation
As stated above, those farms which exceed a certain economic size are defined as commercial, and thus fall into the field of observation. However, because of the different farm structures in the European Union, it is necessary to specify separate thresholds for each Member State.
(*) Provisional information
- Netherlands 2000 data are estimates based on 1999 data.