Economic Accounts for Agriculture

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 include next basic indicators:

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 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, describe and 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 final version of EAA for the year 2000 and the estimate for the year 2001 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 others.

Products used for intermediate consumption should be valued at the purchaser market prices for similar goods and services valid at the 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.