- European Commission
- Agriculture
- FADN
- About FADN
- Field of Survey
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FIELD OF SURVEY
The universe of farms
The field of observation consists of 'commercial' farms
The economic size of farms
Procedure for determining farm size in ESU
Delimitation of the field of observation
The universe of farms
The term "universe" is the statistical term used to define the set of units under enquiry. In the present context, the universe of farms is that set of farms 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.
The field of observation consists of 'commercial' farms
In the universe there are some farms which produce little output and from this point of view do not warrant inclusion in the FADN sample. Thus, in defining FADN's field of observation, the Commission follows the guidelines specified in Regulation 79/65/EEC of 15 June 1965 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.
The economic size of farms
Standard Gross Margins
The concept of Standard Gross Margin (SGM) is used to determine the economic size of farms, which is expressed in terms of European Size Units (ESU). This concept is also used in the Farm Structure Survey organised by Eurostat.
Definition :
The standard Gross Margin (SGM) of a crop or livestock item
is defined as
the value of output from one hectare or from one animal
less
the cost of variable inputs required to produce that output
For each region all crop and livestock items are accorded an SGM. The Liaison Agencies calculate the SGMs themselves on the basis of empirical data collected from farms. To avoid bias caused by fluctuations, e.g. in production (due to bad weather) or in input/output prices, three year averages are taken . SGMs are expressed in Commission publications in European Currency (EUR/ECU).is defined as
the value of output from one hectare or from one animal
less
the cost of variable inputs required to produce that output
SGMs are updated every two years and are calculated on a regional basis for more than 90 separate crop and livestock items. This large number of items not only reflects the diversities of agriculture within the European Union but also indicates the level of detail that is required to ensure that the results of FADN and other surveys are both comprehensive and reliable.
In future, Standard Output (SO) wil replace SGM in calculation of farm sizes. SO is monetary of the gross agricultural output at the farm-gate price.
European Size Units
The economic size of farms 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 Gross Margin. Over time the number of EUR/ECU per ESU has changed to reflect inflation.
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Procedure for determining farm size in ESU
There are five steps in the determining of farm size in ESU.
- Identify the enterprises present on the farm
- Determine the scale of each enterprise (hectares or number of animals)
- Multiply the scale of each enterprise by the appropriate SGM to give the enterprise standard gross margin
- Sum up the different enterprise standard gross margins for the farm. This gives the farm standard gross margin (i.e. the total of the enterprise standard gross margins for the farm)
- Define the economic size of the farm by dividing the farm total gross margin by the value of the ESU
Delimitation of the field of observation
As stated above, those farms which exceed a certain economic size in ESU 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.