Economic Accounts for Agriculture - Preliminary Data

The Economic Accounts for Agriculture (EAA) are the basic systematic implements for measurement of the economic size and efficiency of the agriculture sector, tangibly agricultural basic industry within national economy. EAA are divided into four sections: The production account, the generation of income account, the entrepreneurial income account and the capital account. The fourth section of EAA has been compiled for final results, not for preliminary results of the year.

The deadlines obligatory for member states of the EU for sending EAA data to Eurostat (Regulation (EC) No 138/2004 of the European Parliament and of the Council of 5 December 2003 on the economic accounts for agriculture in the Community):

The 1st estimate of EAA for the year n in November of the year n .

The 2nd estimate of EAA for the year n in January of the year n+1.

Preliminary data of EAA for the year n in September of the year n+1.

1. Output of agricultural activities in value statement that represents the whole final output of the agriculture sector.

The production account records transactions relating to the production process. It consists of available resources on the one hand and uses of these resources on the other hand. The available resources include usable output and initial stocks. Uses are made up from intra-unit consumption, processing by producers, own final consumption, domestic sales to other agricultural units or outside of the industry, sales abroad, own-account produced fixed capital goods and final stocks.

Since the purpose of the EAA is to measure, to describe and to analyse the formation of income from agricultural economic activity (which, in the Member States of the EU, is almost exclusively a commercial activity), it was decided to exclude units that produce solely for own final consumption, e.g. kitchen gardens and private livestock rearing. This type of “small” unit should be recorded if it is above the minimum threshold used in the survey on the structure of agricultural holdings. It should, however, be pointed out that agricultural production for own final consumption by holders larger than the minimum size must be recorded in the EAA.

The output is to be valued at the basic prices according to the revised manual from the year 1997. The basic price is the price receivable by the producers from the purchaser for a unit of a good or service produced as output plus any subsidy receivable on that unit as a consequence of its production or sale minus any tax payable on that unit as a consequence of its production or sale.

The preliminary results of EAA for the year 2006 were compiled in this manner. The whole production account was expressed at the basic prices.

2. Intermediate consumption as the complex of all inputs into the agricultural units at the value statement.

It includes intra-unit consumption of animal feedingstuffs, purchases of goods and services for intermediate consumption from outside the industry for items seeds and planting stock, energy and lubricants, fertilisers and soil improvers, plant protection products and pesticides, animal feedingstuffs, maintenance of materials, maintenance of buildings, veterinary expenses and the others.

Products used for intermediate consumption should be valued at the purchaser market prices for similar goods and services valid at the same time of their insertion into the production process. This price includes taxes less subsidies on products (but excluding deductible taxes like VAT on the products).

3. Gross value added which represents the eventual effect of agricultural sector is the difference between the value of output and the value of intermediate consumption. The gross value added is expressed at basic prices according to the methodology.

4. Net value added is the value that is generated by all agricultural units after the deduction of the fixed capital consumption.

5. Other taxes /other subsidies on production that are posted to account within the framework of the Generation of Income Account.

6. Factor income that measures the remuneration of all factors of production and represents l the total value generated by units engaged in their production activities.

7. Net operating surplus/mixed income that measures the yield from land, capital and unpaid labour. It is the balance of the generation of income account, which indicates the distribution of income between the factors of production and the general government sector.

8. Entrepreneurial income that measures the compensation of unpaid labour, remuneration from land belonging to units and the yield arising from the use of capital. Although entrepreneurial income is not always calculated for industries, it can generally be evaluated for the agricultural industry, as it is possible to determine the part of interest and rents linked exclusively to agricultural activity.

9. Elements of the capital account pick up the gross fixed capital formation (GFCF) according to particular kinds of estate. Capital account has been compiled in the final version of the year n-2 and in the preliminary version of the year n-1 in the September of the year n

Agricultural Labour Input

Data on Agricultural Labour Input (ALI) have formed an integral part of the calculation of the three income indicators derived from agricultural production. ALI is calculated in compliance with standardised methodology of the European Union. The agricultural labour is measured in Annual Work Units (AWU). The number of hours comprising an AWU should correspond to the number of hours actually worked in a full-time job within agriculture (1 AWU = 1800 hours). Therefore it does not include public holiday, paid annual holidays, sick-leave, breaks for meals, etc. Data on agricultural labour input should be classified according to salaried, non-salaried and total ALI (which sum up both two previous categories).

Salaried labour refers to those persons who, by agreement, work for another residential unit (public or private) and who receive in exchange a remuneration in cash or in kind (recorded as compensation of employees in the EAA). Non-salaried labour refers to persons whose work is paid through the income generated by agricultural activity. They are mostly sole-owners or joint-owners of unincorporated enterprises.

The principal objective of calculating agricultural labour input statistics is to provide a systematic and comparable overview of the volume of labour in the agricultural industry and to monitor the trends in agricultural income.


Agriculture Income Indicators

Measurement of agricultural income and its trends is one of the main goals set up by Economic Accounts for Agriculture, the most important indicator for that purpose is Indicator A.


Indicator A: Index of the real income of factors in agriculture, per annual work unit
This indicator corresponds to the real (deflated) net value added at factor cost of agriculture per total annual work unit. Net value added at factor cost is calculated by subtracting intermediate consumption, depreciation and other production taxes from the value of agricultural output at basic prices (i.e. including subsidies on products and excluding taxes on products), and adding the value of other production subsidies. Indicator A is obtained by deflating this net value with the implicit price index of gross domestic product at market prices and dividing by the volume of total labour in agriculture.