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.
 | 2002 | 2003 |
| Factor income, million CZK | 20 407,9 | 20 123,4 |
| Net entrepreneurial income, million CZK | -2 688,5 | -2 463,3 |
Income from agricultural activity per full-time labour equivalent (1 AWU), as it is measured by income Indicator A, decreased by 3,4 % in 2003. The deflator (the implicit price index of GDP at market prices) was 103,1 % in 2003.
The main reasons for this decline were a decrease in the volume of crop production by 12,5 %, on the one hand, and lower real price for animals by 9,7 %, on the other.
Cereals are the most important product of the Czech agriculture and there was a decrease in the output at basic prices of this crop by 17,0 %. Upon a relatively low harvest in 2003, due to drought, the cereal volume decreased by 13,5 %, real price was lower by 4,1 %. There was also a lower volume for oilseeds (-17,3 %), but real price became higher (2,3 %). In contrast, for potatoes there were considerably lower harvest (-22,9 %), real price (-17,5 %) even output at producer and basic prices (-36,3 %). For the crop output as a whole in 2003, the real price was lower by 4,5 % than in 2002 and the output at basic prices went down by 16,3 %.
The output at producer and basic prices of cattle went down by 11,9 %. Pig production is the second most important product of the Czech agriculture. The real price went down by -10,4 % in parallel growth of volume by 0,5 %; consequently the output at producer and basic prices went down (-9,9 %). Output of poultry at producer and basic prices went down by 8,1 % as a result in reduction of real price by 7,0 % even volume by 1,2 %. Milk production has a substantial share in the agriculture of the Czech Republic. The output at basic prices decreased by 4,9 %, whereas the volume in the year 2003 was above the level of the previous year by 0,8 %. Real value of animal output as a whole decreased by 6,9 % at basic prices.
The volume of the agricultural industry went down by 9,1 %, the output at basic prices was by 11,2 % lower than in 2002.
The overall value of intermediate consumption costs was lower than in the previous year (-12,1 % real terms) due to a decline in all items, except of veterinary expenses and services. Feedingstuffs have the biggest share of decreasing of intermediate consumption (as a consequence of livestock cut). They take more than 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 8,8 %, in 2003.
Despite the fact that the value of fixed capital consumption was lower than in 2002 (-8,5 %), net value added dropped at a rate of 9,1 %. Moreover, with a reduction in the other taxes on production (-10,9 % in real terms) and a slight growth in the other subsidies on production (+3,9 %), the decreasing rate of real agricultural factor income, the basis of income Indicator A, was limited to 4,4 %. The volume of agricultural labour input have been reduced in 2003 by 1,1 %.
For the agriculture of the Czech Republic, expenditure on compensation for employees is the most important item. In 2002, the base year of the current exercise, compensation for employees accounted for 96,1 %, in 2003 it made up 93,6 %. 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 2003, compensation of employees was 6,9 % (in real value) lower than in 2002, and net operating surplus showed increase of 58,0 %. The net entrepreneurial income was negative in both years. It shows positive decrease of negative deficit in real value by 11,1 % in 2003 contra 2002.