Economic Accounts for Agriculture
Agriculture Income Indicators | Contents |
Measurement of agricultural income and its trends is one of the main goals set up by Economic Accounts for Agriculture, three indicators are derived from the EAA for that purpose. Agriculture Income Indicators are described as follows:
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.
Indicator B: Index of real net agricultural entrepreneurial income, per unpaid annual work unit
This indicator presents the changes in net entrepreneurial income over year, per non-salaried annual work unit. Net entrepreneurial income is obtained by subtracting the compensation of employees and interest and rent paid from the net value added at factor cost and adding the interest received. This figure is deflated with the price index (as it is described in connection with indicator A) and divided by the volume of non-salaried labour in agriculture.
Indicator C: Real net entrepreneurial income from agriculture
This indicator defines the change in the real (deflated) net entrepreneurial income as a separate value. It differs from Indicator B in it, which compares that change with a trend of non-salaried ALI. It could be said that the Indicator C is a base for the Indicator B.
To calculate indicators B and C, more information is therefore needed than for calculating Indicator A, data must contain: the compensation of employees, rents and interest paid and received, and on the breakdown of labour input into its salaried and non-salaried components.
 | 2001 | 2002 |
| Factor income, million CZK | 26 165,5 | 19 677,4 |
| Net entrepreneurial income, million CZK | 2 721,0 | -3 419,0 |
Income from agricultural activity per full-time labour equivalent (1 AWU), as it is measured by income Indicator A, decreased by 21,9 % in 2002. The deflator (the implicit price index of GDP at market prices) was 102,6 % in 2002.
The main reasons for this decline were a decrease in the output volume of crop production by 7,7 %, on the one hand, and lower real-terms producer prices for animals by 20,1 %, on the other.
Cereals are the most important product of the Czech agriculture and there was a decrease in the output value at basic prices of this crop by 17,5 %. Upon a relatively low harvest in 2002, due to summer-floods, the cereal output volume decreased by 5,7 %, real-terms producer prices were lower by 13,0 %. There were also a lower output volume and real-terms producer prices for oilseeds (-20,1 % and -10,9 % respectively). In contrast, for potatoes there were a lower harvest (-3,3 %) and strong progress in both real-terms producer prices (+41,5 %) and the output value at producer and basic prices (+36,9 %). For crop output as a whole, the real-terms producer price was 3,2 % lower than in 2001 and the output value at basic prices went down by 10,4 %.
The output value at basic prices of cattle rose by 1,0 %. Pig production is the second most important product of the Czech agriculture. Both real-terms producer prices and output value at producer and basic prices fell strongly below the previous year’s level (-28,7 % and –26,3 % respectively). The output volume rose by 3,4 %. The output value at producer and basic prices of poultry was 3,0 % lower than in 2001, the real-terms producer prices fell by 12,2 %. The output volume grew by 10,4 %. Milk production has a substantial share in the agriculture of the Czech Republic. Both output volume and real-terms producer prices rose a little above the previous year’s level. The output value at producer prices of animal output decreased by 10,4 %. At basic prices there was a fall by 10,6 %.
The output volume of the agricultural industry went down by 3,7 %, the output value at producer and basic prices was 10,5 % lower than in 2001.
The overall value of intermediate consumption of goods and services was lower than in the previous year (-4,3 % real terms) due to a decline in the expenditure on energy and lubricants (-26,3 %), fertilisers and soil improvers (-13,5 %), plant protections and pesticides (-17,1 %), other goods and services (-10,9 %) and feedingstuffs (-1,5 %). The last item takes a half of the whole intermediate volume. On the back of the overall developments of output and input, agricultural gross value added at basic prices in the Czech Republic decreased by 23,1 %, in 2002.
Despite the fact that the value of fixed capital consumption was slightly lower than in 2001 (-0,7 %), net value added dropped at a rate of 33,1 %. Moreover, with an increase in the other taxes on production (+2,3 % in real terms) and a strong growth in the other subsidies on production (+26,7 %), the decreasing rate of real agricultural factor income, the basis of income Indicator A, was limited to 26,7 %. The volume of agricultural labour input have been reduced in 2002 by 6,2 %.
For the agriculture of the Czech Republic, expenditure on compensation for employees is a most important item. In 2001, the base year of the current exercise, compensation for employees accounted for 74,8 %, in 2002 it made up even 99,7 %. This means that both net operating surplus and net entrepreneurial income are relatively small or negative. Even little changes in the compensation of employees would be reflected in strong variations of these two income aggregates. In 2002, compensation of employees was 2,2 % (in real terms) lower than in 2001, and net operating surplus showed a decrease of 99,2 %. In 2002, net entrepreneurial income was negative (it had been positive in 2001), and for this reason it is not possible to calculate income Indicators B and C.