Archive:Agricultural output, price indices and income

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Data from September 2009, most recent data: Further Eurostat information, Main tables and Database.

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

!!!Introduction has to be updated!!! This article gives an overview of recent changes in agricultural output, gross value added and prices in the European Union (EU), and takes a look at their effect on income from agricultural activity. Agricultural output increased by 7.4 % in 2007, compared with 2006, reaching its highest level in the last ten years. Producer output prices, after removal of inflation, rose on average by 0.8 % per year in the EU-27 between 2002 and 2007. In parallel to rising gross value added, there was an average 5.8 % rise in income from agricultural activity across the EU in 2007 compared with the previous year.

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)

The agricultural industry of the EU-27 generated EUR 140 600 million of gross value added at producer prices in 2008, which represented a modest reduction of 2.4 % in relation to the previous year. Strong increases in both the value of crop output (up 5.7 % to a relative high of EUR 195 300 million in 2008) and animal output (up 7.6 % to a relative high of EUR 148 300 million) were countered by a larger increase in the value of intermediate consumption of goods and services (12.7 % higher in 2008). Values comprise a volume and price component. One important strand of recent agricultural policy has been the move away from price support, so that prices more accurately reflect market forces and changes in supply and demand. Among the Member States, there were sharp contrasts in the development of deflated agricultural output prices during the period between 2002 and 2008; there were rises in the majority of Member States, the strongest increases being recorded for Malta (average growth of 3.9 % per annum) and the United Kingdom (4.8 % per annum), while reductions were posted in eight of the Member States, the largest of which was in Slovakia (-3.9 % per annum). Across the EU-27 as a whole, deflated agricultural output prices rose by an average of 0.9 % per annum in the six-year period through until 2008, although this was far less than the average rate of increase in deflated input prices for the means of agricultural production during the same period (2.4 % per annum). This characteristic was widespread among the Member States: indeed, Germany was the only Member State for whom the deflated price of the means of agricultural production was relatively unchanged over the period in question (an average rate of decline of 0.1 % per annum). Real net value added at factor cost of agriculture per unit of full-time labour (measured in annual work units), also termed as agricultural income indicator A , declined by an average 3.7 % across the EU-27 in 2008, compared with a relative peak in 2007. There were stark contrasts among the Member States, however, in the rate of change in this measure of income from agricultural activity in 2008, with increases of between 15 % and 20 % in the United Kingdom and Hungary, and closer to 30 % in Romania and Bulgaria, contrasting with declines of around 20 % to 25 % in Latvia, Belgium, Estonia and Denmark.

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);
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) is to provide farmers with a reasonable standard of living. Although this concept is not defined explicitly, one of the measures tracked is income development 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;
relationships between prices and quantities of both inputs and outputs;
responds to the need to have internationally comparable information.

In addition, the EAA data meets the requirement for 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.

Further Eurostat information

Publications

Main tables

Economic Accounts for Agriculture and Forestry

Agricultural prices and price indices

Database

Economic Accounts for Agriculture, see:

Economic Accounts for Agriculture

Agricultural prices and price indices

Selling prices of agricultural products (absolute prices)

Price indices of agricultural products

Dedicated section

Agriculture

Archive:Agricultural output, price indices and income

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