Archive:Agricultural output, price indices and income

Data from September 2008, most recent data: Further Eurostat information, Main tables and Database.

Table 1: Agricultural output and value added(EUR million)

Agricultural gross value added in the EU-27 increased by 7.4 % in 2007 (compared with 2006) and as a result was at its highest level in the last ten years. Deflated agricultural producer (output) prices rose on average by 0.8 % per annum in the EU-27 between 2002 and 2007. in parallel to this increase in gross value added, there was an average 5.8 % rise in income from agricultural activity (indicator A) across the EU-27 in 2007 (compared with the previous year), however there were large differences between Member States.

Main statistical findings

Graph 1: Agricultural output and gross value added (nominal), EU-27(2000=100)

Graph 2: Evolution of deflated price indices of agricultural output and means of agricultural production, 2002-07(average annual growth rate, %)

Table 2: Price indices of agricultural output (nominal), EU-27(2000=100)

Table 3: Index of income from agricultural activity (indicator A)(2000=100)

Agricultural gross value added in the EU-27 increased by 7.4 % in 2007 (compared with 2006) and as a result was at its highest level in the last ten years (see Graph 1 and Table 1). In 2006 and 2007 both crop and animal output increased, with the growth in crop output being particularly strong.

Deflated agricultural producer (output) prices rose on average by 0.8 % per annum in the EU-27 between 2002 and 2007 (see Graph 2 and Table 2). An analysis of (nominal) producer price indices over the same period shows that price increases averaged 3.4 % per annum, with crop output prices rising more than twice as fast as animal output prices (4.5 % per annum compared with 2.0 % per annum). Several cereal products recorded double-digit annual average price increases over this five-year period: for example, rye, barley and wheat. This was almost entirely due to extremely high price increases in 2007. Only a few agricultural products recorded a fall in prices over this period, most notably sugar beet, for which prices fell by 27 % in total between 2004 (the last peak in prices) and 2007. There was almost no change in the price of the output of pigs or sheep and goats over the period considered (2002-2007).

In parallel to the increase in gross value added, there was an average 5.8 % rise in income from agricultural activity (indicator A) across the EU-27 in 2007 (when compared with the previous year). However, there were large differences between Member States. Romania recorded a fall of 16.7 % in income from agricultural activity in 2007, with Malta, Portugal and Italy recording reductions of at least 3 %. In contrast in Lithuania indicator A rose by 46.0 % in 2007, while Belgium, Poland, the Czech Republic and Germany all recorded increases in excess of 20 %.

Data sources and availability

The Economic Accounts for Agriculture (EAA) comprise a production account, a generation of income account, an entrepreneurial income account and some elements of a capital account. For the output items of agricultural, hunting and related service activities, Member States transmit to Eurostat values at basic prices, as well as their components (the value at producer prices, subsidies on products and taxes on products). For the items of intermediate consumption, values at purchaser prices are transmitted. The data for the production account and for gross fixed capital formation are transmitted in both current prices and the prices of the previous year.

Agricultural income indicators (in the EAA) are presented in the form of:

an index of real income of factors in agricultural activity per annual work unit (indicator A);
the index of real net agricultural entrepreneurial income, per unpaid annual work unit (indicator B), and;
net entrepreneurial income of agriculture (indicator C).

The concept of output, for animal and crop output, comprises sales, changes in stocks, and products used for processing and own final use by producers. EU agricultural price indices are obtained by a base-weighted Laspeyres calculation (2000=100), and are expressed both in nominal terms, and deflated using an implicit HICP deflator.

Context

One of the principal objectives of the Common Agricultural Policy (CAP) remains providing farmers with a reasonable standard of living. Although this concept is not defined explicitly, one of the measures tracked is the development of incomes from farming activities. Economic Accounts for Agriculture (EAA) are one of the data sources that provide such income measures. This macro-economic set of data is used to analyse the production process of agricultural activity and the primary income generated by it. The EAA provide key insights into:

the economic viability of agriculture,
its contribution to a Member State’s wealth,
the structure and composition of agricultural production and inputs,
the remuneration of factors of production, and
relationships between prices and quantities of both inputs and outputs.

In addition, the EAA data responds to the need to have internationally comparable information.

Eurostat also collects annual agricultural prices (in principle net of VAT) to compare agricultural price levels between Member States and study sales channels. Price indices for agricultural products and the means of agricultural production, on the other hand, are used principally to analyse price developments and their effect on agricultural income.