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Agricultureand RuralDevelopment

EU Farm Economics Overviewbased on 2013 FADN data

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EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT Directorate E. Economic analysis, perspectives and evaluation; communication E.3. Economic analysis of EU agriculture

Brussels, 2016

EU FARM ECONOMICS OVERVIEW

FADN 2013

EXECUTIVE SUMMARY

This report provides an overview of key economic developments in European agricultural

holdings based on 2013 data, the latest available in the Farm Accountancy Data Network

(FADN). The FADN survey covers farms that account for the majority of EU agricultural

production.

After the sharp decline in farm income in 2009, recovery continued until 2012. In 2013

income decreased by 5.8% to approximately the 2010 level. This decrease was due to higher

input costs and a slight decline in the value of agricultural output. The latter is mostly linked

to the performance of crop production (-6.2 % per farm in the EU-28) since the total output of

livestock and livestock products increased by +4.4% per farm in the EU-28. The decline in

the value of crop production is due to a drop in real prices (-3.7%) which is partly offset by

an increase in volumes (+2.7%).1 However, while most of the Member States reported similar

levels of total output figures between 2012 and 2013, significant income differences were

observed across European regions and types of farming. Intermediate consumption increased

by 1.4 % from 2012 to 2013. Despite high input prices such as the cost of animal feed and of

plant protection in 2013, farms specialised in granivores (pigs and poultry) and field crop

farms generated the highest income per person. From 2012 to 2013, the average income per

labour unit increased most significantly for dairy farms but only slightly for farms specialised

in permanent crops other than wine. The income increase per annual work unit (AWU) in

dairy farms correlates with the increase in dairy herds in Europe but also with higher milk

prices in 2013 which were above the level of previous years. The biggest decrease in income

per AWU (by 14.7%) was recorded for farms specialised in field crops. The decrease was less

significant in farms specialised in granivores, wine, horticulture and in mixed farms.

1 Source: EU agriculture – Statistical and Economic Information – 2013

http://ec.europa.eu/agriculture/statistics/agricultural/2013/pdf/full-report_en.pdf

https://de-mg6.mail.yahoo.com/neo/b/message?sMid=0&fid=Inbox&fidx=1&sort=date&order=down&startMid=0&filterBy=&ac=RFd36Yj0Xk4rePlZxJF_t3SGy3A-&.rand=http://ec.europa.eu/agriculture/statistics/agricultural/2013/pdf/full-report_en.pdf

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The income gap (farm net value (FNVA) per AWU) between the EU-N132 and EU-15 began

to narrow again in 2013, after a widening gap in 2012. Nevertheless, the average

FNVA/AWU per farm was nearly four times higher in the EU-15 than in the EU-N13, while

the remuneration of family labour in the EU-15 even exceeded this fourfold difference.

Finally, the proportion of direct payments to total receipts (total output + balance of current

subsidies & taxes) in the EU-28 remained stable at 10.3%, which is consistent with 2012.

This trend is in line with the nearly unchanged value of agricultural output (in real terms) in

Europe from 2012 to 2013.

Income developments

The EU-28 average farm net value added (FNVA)3 decreased by 5.8 % from 2012 to

2013, due mainly to the increase in agricultural input costs (linked mainly to the

increased costs of feeding stuffs and crop protection) while output value remained

nearly unchanged (-1.3%). FNVA fell back close to the 2010 level, having started to

recover from the low point reached in 2009. Average FNVA per annual work unit

(FNVA/AWU) decreased by 4.6%, from EUR 19 000 in 2012 to EUR 18 100 in 2013.

This decline was driven by the decrease in FNVA, with labour input remaining nearly stable.

It was primarily influenced by a drop in agricultural real prices, which was partly offset by an

increase in volumes. Producer prices for crops declined as well in real terms in 2013 as

compared to 2012. Remuneration per family work unit4 stood at around EUR 11 400 in 2013,

down from EUR 12 900 in 2012.

The drop in income masked substantial differences across Member States, regions and

types of farming. Holdings in Denmark, north-western Germany and northern France

generated the highest FNVA/AWU in 2013. Denmark and the Sachsen-Anhalt region in

Germany had the highest average FNVA/AWU in the EU. The regions with low FNVA/AWU

(i.e. below EUR 10 000) were mostly situated in the EU-N13. The lowest average

FNVA/AWU per farm was recorded in the Jadranska Hrvatska region, in Croatia. Only two

regions in the EU-15, namely Norte e Centro (Portugal) and Sterea Ellas-Nissi Egaeou-Kriti

(Greece) had an average FNVA/AWU below EUR 10 000. There is a 40-fold difference

between the highest income per AWU (Denmark) and the lowest (Jadranska Hrvatska).

On average, farms specialised in granivores, field crops, wine, milk and horticulture had the

highest FNVA/AWU, while the FNVA/AWU of farms specialised in other permanent crops,

grazing livestock (other than milk) and mixed activities remained below the EU-28 average.

2 EU-N13 includes the 10 Member States that joined the EU in 2004, Romania and Bulgaria from 2007 and

Croatia for 2013 only.

3 Farm net value added (FNVA) is used to remunerate the fixed factors of production (labour, land and

capital) whether they be external or family factors. In order to obtain a better measurement of the

productivity of the agricultural workforce and to take into account the diversity of farms, FNVA is also

calculated by annual work unit (AWU, work of one person occupied full time on a farm). This is one of the

FADN’s main income indicators.

4 Remuneration of family labour is equal to: FNVA + balance of subsidies and taxes – wages paid – paid rent

– estimated costs of own land and own capital. The value is given per family work unit (FWU).

5

In 2013, FNVA/AWU increased for dairy farms but only insignificantly for farms specialised

in other permanent crops. All other types of farming such as farms specialised in field crops,

granivores, wine, mixed farming and horticulture recorded lower income than in 2012. The

significant income increase for dairy farms from 2012 to 2013 was mainly due to higher milk

prices, an increase in the European dairy herd and a higher average yield per dairy cow. As

for the distribution of FNVA/AWU in the EU-N13, the average income per worker in

these countries remained significantly below the EU-15 level. In the EU-N13, average

FNVA/AWU stood at around EUR 7 600, but was under EUR 3 200 in more than 50 % of

farms (median income).

Role of direct payments

In 2013, direct payments on average accounted for nearly 33% of FNVA in the EU-28, an

increase on 2012 (31%). This slight increase was the result of a marginal decrease in FNVA

while direct payments remained stable in 2013. The proportion of direct payments to FNVA

was highest in Finland (79%) and second-highest in Slovakia (77%).

By contrast, direct payments accounted for only 10% of FNVA in the Netherlands. This

shows that Dutch agriculture is more focused on the more profitable sectors that are less

dependent on direct payments, such as horticulture and pig and poultry production.

The proportion of direct payments to agricultural income also fluctuated markedly with the

type of farming. In particular, direct payments represent a contribution to FNVA (54-44%) of

grazing livestock, mixed and field crop farms due to the historical orientation of the common

agricultural policy (CAP). On the other hand, subsidies account for only a very limited part of

total receipts (total output + balance of subsidies and taxes) of wine and horticulture holdings

(7-3%).

Direct payments helped to even out the variability in EU farm income. The average amount of

direct payments received in 2013 was EUR 8 360 per farm covered by the FADN survey.5

Characteristics of farms covered by the FADN

The structure of European farms covered by the FADN varies markedly in several

ways:

Asset value. The average farm size in terms of asset value was highest in Denmark and in

the Netherlands (EUR 2 520 000 and EUR 2 290 000, respectively). This reflects the very

high values for land (average rent paid per hectare) and the importance of sectors which

typically need considerable investment (such as milk, granivores and horticulture). In

contrast, farms in Romania had the lowest total asset value (below EUR 40 000) due to

low land prices, small farm sizes and less capital-intensive types of farming. Bulgaria

doubled the asset value of its farms from 2007 to 2013. The value of land in Romania and

Bulgaria remains well below the EU-28 average. Land value (based on the closing

valuation of land) in the Netherlands was 35 times higher than in Romania.

5 The FADN covers the farms that account for over 90 % of agricultural production in the EU. It does not

cover the smallest farms with low production. See Annex 1 for more details.

6

Labour input. In the FADN survey, the average number of workers employed per farm

in the EU-28 stood at 1.5 AWU in 2013. However, the figure varied significantly across

Member States, ranging from 15.5 AWU in Slovakia to 1.1 AWU in Greece. The average

number of workers per farm in horticulture (the sector with the highest labour input) was

approximately 2.5 times higher than in permanent crops other than wine holdings (the

sector with the lowest labour input).The share of unpaid labour (expressed as family

labour hours) accounted for 77% of the total labour force in the EU-28 and was the most

prevalent form of labour in most Member States except for Slovakia, the Czech Republic,

Hungary, Estonia, Denmark and Bulgaria. In these Member States, the proportion of

family labour of the total labour force was below 50%. The average hourly wage of farm

workers stood at EUR 7.4 in the EU-28 in 2013, up 1.7% on the previous year. This

nominal wage increase more than compensated for the general increase in prices

(EU-28 HICP6 inflation stood at 1.4% in 2013).

Land use. The average size of farms covered by the FADN survey was 33 ha7 in 2013.

However, it varied considerably across Member States, ranging from 595 ha per farm in

Slovakia to 3 ha per farm in Malta. Rented land accounted for 54% of total agricultural

area in the EU-28 in 2013. Land rents in the EU-28 have increased by 16 % since 2009,

from EUR 143 per ha to EUR 167 per ha in 2013. They were particularly high in the

Canary Islands (EUR 1310 per ha) and in the Netherlands (EUR 970 per ha), but

remained under EUR 30 per ha in the Baltic countries (Latvia, Estonia). They also varied

markedly across types of farming: the level of rent per hectare in horticulture and the

wine sector was 8 times higher than the rental price paid by grazing livestock farms.

6 The harmonised index of consumer prices (HICP) is an economic indicator constructed to measure the

changes over time in the prices of consumer goods and services acquired by households. It is the official

measure of consumer price inflation in the euro zone for the purposes of monetary policy in the euro area

and for assessing inflation convergence as required under the Maastricht criteria.

7 The FADN does not contain all agricultural holdings in the EU-28, only those of a certain minimum size (as

specified in Council Regulation (EC) No 1217/2009). Based on this criterion many small farms have been

excluded from the field of survey. Accordingly, it should be emphasised that the average farm size

mentioned in the report does not correspond to the average farm size of the total agricultural population. See

the chapter on methodology for more information.

7

The Farm Accountancy Data Network (FADN) is a European system of sample surveys

that are run each year to collect structural and accountancy data of farms. Its aim is to monitor

the income and business activities of agricultural holdings and to evaluate the impacts of the

common agricultural policy (CAP).

The scope of the FADN survey covers only farms whose size exceeds a minimum threshold.

It thus represents the largest possible proportion of agricultural output, agricultural area and

farm labour of holdings run with a market orientation. The sample for 2013 consisted of

approximately 86 800 holdings in the EU-28, which represent nearly 5.0 million of the

10.8 million farms included in the FSS 2013, i.e. (46%).8

The rules applied aim to provide representative data for three criteria: region, economic size

and type of farming. The FADN is the only harmonised source of micro-economic data,

which means that the accounting principles are the same in all Member States.

The most recent FADN data available for this report are for the 2013 accounting year, due to

the time needed for data collection, control and processing.

For further information please see Annex 1 on ‘Farm Accountancy Data Network in the

context of the Farm Structure Survey − Methodology’ (page 65).

8 Farm Structure Survey (FSS) is carried out every 3 or 4 years as a sample survey and once every 10 years as

a census by all Member States. Its purpose is to obtain reliable data on the structure of agricultural holdings

in the EU, in particular on land use, livestock and the labour force.

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Contents

1. ECONOMIC SITUATION OF FARMS..................................................................... 9

1.1. Farm income ...................................................................................................... 9

1.2. Distribution of income .................................................................................... 20

1.3. Income components ......................................................................................... 28

1.4. Return on assets ............................................................................................... 31

2. IMPORTANCE OF DIRECT PAYMENTS FOR FARM INCOME ....................... 34

2.1. Proportion of direct payments to total receipts ............................................... 34

2.2. Proportion of direct payments to FNVA ......................................................... 35

3. CHARACTERISTICS OF ANALYSED FARMS ................................................... 38

3.1. Financial structure ........................................................................................... 38

3.1.1. Total asset value ................................................................................ 38

3.1.2. Total liabilities ................................................................................... 40

3.1.3. Development of farm net worth ........................................................ 42

3.1.4. Solvency ............................................................................................ 43

3.1.5. Current and fixed assets .................................................................... 45

3.2. Labour ............................................................................................................. 47

3.2.1. Labour force ...................................................................................... 48

3.2.2. Remuneration of farm workers.......................................................... 50

3.3. Land ................................................................................................................. 52

3.3.1. Farm size ........................................................................................... 52

3.3.2. Importance of rented land.................................................................. 53

3.3.3. Level of land rents ............................................................................. 55

4. CROATIA IN FOCUS .............................................................................................. 57

4.1. Economic situation of farms in Croatia ........................................................... 58

4.2. Financial structure of farms in Croatia ............................................................ 60

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1. ECONOMIC SITUATION OF FARMS

This chapter reviews the economic situation of farms across the EU, focusing predominantly

on the level, development and distribution of farm income. It also discusses the various farm

income components and the return farmers receive on their investment.

1.1. Farm income

For the purpose of this report, the income of agricultural holdings is measured using farm net

value added, family net income and the remuneration of family labour.

Farm net value added (FNVA) is equal to gross farm income minus depreciation costs. It is

used to remunerate the fixed factors of production (labour, land and capital), whether they be

external or family factors. As a result, agricultural holdings can be compared regardless of

whether family or non-family factors of production used.

FNVA = output + Pillar I and Pillar II payments + any national subsidies + VAT balance —

intermediate consumption — farm taxes (income taxes are not included) — depreciation.

The value is calculated per annual work unit (AWU) to take into account the differences in the

scale of farms and to obtain a better measure of the productivity of the agricultural

workforce.

Farm net income (FNI): comprises the remuneration of family labour, own land and own

capital. It is calculated by deducting the external factors of production9 from the farm net

value added and by adding the balance of subsidies and taxes on investments.

FNI = FNVA — total external factors + balance of subsidies and taxes on investments

Remuneration of family labour: In the agricultural sector, the bulk of the workforce consists

of family members who do not receive a salary but have to be remunerated from farm income.

As the FNVA is required to finance not only family labour but all fixed production factors,

remuneration of family labour is another way of estimating income. It is calculated as

follows:

Remuneration of family labour = FNVA + balance of subsidies and taxes — total external

production factors — opportunity costs of own land — opportunity costs of own capital. Or

starting from the previous indicator: farm net income — opportunity cost of own land —

opportunity cost of own capital

The value is calculated per family work unit (FWU). Only farms that use unpaid labour

(which in most cases means family members) are included in the calculation.

Results by Member State

FNVA varied significantly across the EU in 2013. It was highest in Slovakia, at EUR 176 100

per farm. This is almost 30 times higher than in Slovenia, the country with the lowest value.

Denmark, the Netherlands and the Czech Republic also had high values. The EU-28 average

was around EUR 27 900 (see Figure 1.1). The main advantage of the average FNVA/farm lies

in its relative simplicity but it fails to reveal the differences in farm size, type of farming or

9 External factors of production are the remuneration of inputs such as work, land and capital which are not

the property of the holder (e.g. wages, rent, interest paid).

10

structural decreases in the labour force employed in agriculture. To overcome this, FNVA is

usually expressed per AWU, which can be seen as a measure of partial labour productivity.

From this perspective, the general picture of considerable income variability within the EU

remains unaffected, though the ranking of Member States changes somewhat (Figure 1.3):

Denmark, the Netherlands and Germany registered the highest FNVA per AWU, at

EUR 89 300, EUR 54 800 and EUR 42 800 respectively. This means that the FNVA per AWU

for Denmark is nearly five times the value of the average FNVA per AWU for the EU-28

(EUR 18 100), and is more than twice the average for the Netherlands and Germany. This

shows the predominance of granivore production, specialist horticulture and milk sectors in

the three countries’ agricultural sectors. At the other end of the spectrum, Poland, Romania

and Slovenia had the lowest FNVA per AWU (EUR 6 900, EUR 5 900 and EUR 4 200

respectively), because their agriculture has remained largely oriented towards less intensive

and productive types of farming, namely mixed farming and other permanent crops. It should

also be noted that in 2013 there was a decrease in the crop production with agricultural output

falling the most in Greece (-7.4%) and Hungary (-6.9%) compared to 2012.

It is also worth noting that, of the EU-15 countries, only Portugal and Greece — which are

characterised by a large number of small farms — had an FNVA per AWU below the EU-28

average. Except for Hungary and the Czech Republic, EU-N13 Member States had an average

income (FNVA/AWU) below the EU-28 average (EUR 18 100).

Figure 1.1: Farm net value added by Member State in 2013

(average per farm in EUR)

Source: Directorate General for Agriculture and Rural Development (DG AGRI) EU-FADN.

Farm net value added is an indicator that measures the remuneration of all fixed production

factors, whether they are external or family factors. In order to distinguish between them with

respect to income, we have to exclude the external factors of production from the calculation.

By doing this we arrive at farm net income (FNI). Using this indicator changes the

profitability in Member States changes. It is noteworthy that Slovakia’s FNI was the lowest

out of all countries in 2013 while its FNVA was the highest.

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This is down to the characteristics of Slovakian agriculture, which is based mainly on large-

scale holdings cultivated by paid labour. Small family farms make up a very small proportion

of total agricultural land and 80% of the holdings are legal entities.10

The Netherlands maintained a leading position in terms of farm net income, indicating that

income is still high enough to finance the estimated family factors of production, even after

deducting all external factors. Belgium performed somewhat better on FNI than it did on

FNVA, which shows that a significant part of its labour is family labour and that the income

level generated was enough to cover the estimated family factors as well. The average FNI in

the EU-28 was EUR 17 900.

Figure 1.2: Farm net income by Member State in 2013


Source: DG AGRI EU-FADN

An alternative measure of agricultural income is the remuneration of family labour, as a high

proportion of work in the agricultural sector is carried out by family members. This is

expressed per family work unit (FWU) and is calculated by deducting from FNVA the costs

of wages, rent and interest paid, and the opportunity costs of own land and capital. At EU-28

level, the average remuneration of family labour per FWU stood at EUR 11 400 in 2013. It

represented a decrease of 11% compared to 2012. In 2013 Denmark retained its top ranking

from the previous year with the highest remuneration of family labour per FWU

(EUR 50 900), followed by the Netherlands (EUR 47 400) and Belgium (EUR 33 400).

Denmark and the Netherlands achieved these levels despite having had the highest

opportunity cost of own land among the Member States. The gap between FNVA/AWU and

remuneration of family labour/FWU is the widest in Denmark, Sweden and Ireland. Reasons

for this are the high cost of land (46% of all own opportunity costs) and interest paid (42% of

total external factors) by Danish farmers and the high amount of rent paid by Irish farmers

(45% of total external factors). The average income per farm in 2013 in Slovenia (EUR -185)

did not cover the remuneration of family labour.

10 Holdings of less than 4000 standard output (SO) occupy only 2.2 % of the total utilised agricultural area

(UAA) in Slovakia. Eurostat, FSS 2013.

http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Figure_Number_of_holdings_and_Utilised_Agriculture_Area_(UAA)_by_UAA_size_classes_SK_2010.PNG

http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Figure_Number_of_holdings_and_Utilised_Agriculture_Area_(UAA)_by_UAA_size_classes_SK_2010.PNG

12

Figure 1.3: FNVA per AWU and remuneration of family labour per FWU, by Member

State in 2013

(average in EUR)


Results by EU group

Building on the high annual agricultural income (EUR 41 700) in 2011 in the EU-15, the

average FNVA per farm continued increasing to EUR 42 700 in 2012 (+2.4 %) but decreased

again in 2013 to the 2010 income level (-5.2% compared to 2012). In 2013 the decrease in the

EU-28 value of agricultural output (down by -1.3%) was linked to the performance of the

crop production (down by -6.2% per farm on average) since the total output of livestock and

livestock products were increased by 4.4% per farm on average. While total labour input

remained stable in the EU-N13, FNVA per farm decreased slightly from EUR 12 500 to

EUR 12 000, which also resulted in a decrease in the FNVA/AWU (by -2.4%). The

remuneration of family labour per FWU in the EU-N13 decreased more visibly, from

EUR 4 900 to EUR 4 400 (by -11.8%). It should be noted that there was a break in the time

series between 2006 and 2007 due to the accession of Romania and Bulgaria to the EU.

Especially Romania, with its more than 1 million farms represented in the FADN sample had

a big impact on the sample and also on the income development.

In absolute terms, FNVA per AWU increased by EUR 5 200 or 24% in the EU-15 between

2004 and 2013, and by EUR 2 600 or 52% in the EU-N13 — a stronger increase in relative

terms, but a widening gap as income in the EU-15 grew more in absolute terms. Looking at

the 2004-2013 period and taking into account the changes in the composition of the EU

groups, a convergence in nominal farm income can be observed between EU-15 and the two

other groups of Member States who joined to the EU in 2004 (EU- N10) and 2007 (EU-N2).

While in 2004, FNVA per AWU of EU-N10 was 23% of EU-15's income per AWU, the same

13

was 34% in 2013. In case of EU-N2, FNVA per AWU was 9% of EU-15's FNVA per AWU

in 2007, while it has increased to 23% of EU-15's income per labour unit (see Figure. 1.4.)

Figure 1.4: Long-term developments in FNVA per AWU in the EU groups




(EU-15 = 100 %)


14

Figure 1.6: Long-term developments in FNVA per AWU and remuneration of family

labour per FWU



Regional differences

Map 1.1 shows the regional differences in FNVA per AWU in the EU-28 in 2013. Based on

this indicator, the agricultural holdings with the highest income per working unit were mainly

located in Denmark, north-western Germany and northern France. In these regions, there is a

high percentage of highly intensive granivore production, horticulture and milk farms. On the

other hand, regions with very low farm income (below EUR 10 000 per year) were mostly

situated in the EU-N13. The lowest average FNVA/AWU per farm was in the

Jadranska Hrvatska region in Croatia. Only two regions in the EU-15, namely Norte e Centro

(Portugal) and Sterea Ellas-Nissi Egaeou-Kriti (Greece) had an average FNVA/AWU below

EUR 10 000. There is a 40-fold difference between the highest income per AWU (Denmark)

and the lowest (Jadranska Hrvatska).

15

Map 1.1: FNVA per AWU by FADN region in 2013

Source: DG AGRI EU-FADN.

The differences in income between the EU-15 and the EU-N13 appear to be more pronounced

when income is measured by remuneration of family labour per FWU compared to

FNVA/AWU (see Map 1.2). There are some regions in the EU-15 where the average income

per unit of family labour is extremely high, such as the western part of eastern Germany

(Sachsen-Anhalt EUR 73 200), and also in the north Mecklenburg-Vorpommern

(EUR 64 500). This is also the case in the Picardie region (EUR 51 400) in France. The

highest income per FWU in the EU-15 is nearly four times that of the Észak-Magyarország

region in Hungary, which have the highest income per FWU (EUR 18 400) in the EU-N13.

Income levels are lowest in Romania, Croatia and Slovenia. The southern regions of Romania

and Croatia have especially low levels of remuneration of family labour per FWU (EUR 1 900

and EUR 1 800 respectively) while this value is even negative in Slovenia. The differences

between the extreme values in the EU-N13 increased in 2013 compared to 2012.

16

Map 1.2: Remuneration of family labour per FWU, by FADN region in 2013


Results by type of farming

Figure 1.4 shows significant differences in average FNVA across different types of farming.

In particular, average farm income was approximately four times higher in the horticulture

sector than in the mixed crops and livestock sectors. One explanation for the relatively low

income of mixed farms is that many of them are very small. On the other hand, incomes for

holdings specialised in horticulture may have been higher in 2013 due to the growth in the

output of some vegetables and fruits (e.g. potatoes, peaches, pears) and a positive trend in real

producer prices. The high income levels of farms specialised in horticulture can also be

explained by the fact that this sector is characterised by higher added-value production.

When measured by FNVA per AWU, the general picture of income distribution by type of

farming changes (see Figure 1.5). Farms specialised in horticulture lost their position of

having the highest FNVA in absolute terms, mainly due to the paid labour intensity associated

with this type of farming. Farms specialising in pigs and poultry had the highest FNVA per

AWU in 2013, most of these farms are big in terms of economic size. Field crop farms

achieved the second highest FNVA per AWU among the types of farming, but at the same

time, they recorded the biggest income decrease (by -14.7%) compared to 2012 due to the

general reduction in crop production. Producer prices for crops declined substantially in real

terms in 2013 as compared to 2012, in particular for cereals (by -15%) and oilseeds

(by -14%).

17

The income of farms specialising in granivores, field crops, wine, milk and horticulture was

above the EU-28 average (EUR 18 100). Income per worker remained below average for

permanent crop farms (other than wine), farms specialising in grazing livestock (other than

dairy) and mixed farms. The latter two types of farm had the lowest FNVA per AWU

(EUR 13 300 and EUR 10 300 respectively). From 2012 to 2013, FNVA per AWU increased

only for milk (by +8.4%), while income per labour unit decreased for all other types of

farming, particularly for farms specialised in granivores (by -9.5%) and wine (by -5.8%). The

income increase of dairy farms was due to the high prices and tight supply that characterised

the milk and dairy products market in 2013.11

The remuneration of family labour per FWU

alters the picture of relative productivity differences across the various types of farming.

While holdings specialised in granivores remained still at the top of the spectrum and mixed

farms at the bottom, the order of other types of farming changed. Horticulture farms did better

than farms specialising in field crops and wine in terms of remunerating family labour. Farms

specialised in wine production were ranked third on income for family labour (see Figure 1.5)

Figure 1.7: Average FNVA in the EU-27 by type of farming in 2013




http://ec.europa.eu/agriculture/statistics/agricultural/2013/pdf/overview_en.pdf.

http://ec.europa.eu/agriculture/statistics/agricultural/2012/pdf/overview_en.pdf

18

Figure 1.8: FNVA per AWU by type of farming in 2013

(in EUR)


Results by organisational form and EU group

From an organisational point of view, holdings in the FADN are divided into three groups:

(1) family farms, where the profits cover unpaid labour and own capital of the holder and the

holder’s family;

(2) partnerships, where the profits cover the production factors brought into the holding by a

number of partners (at least half of whom participate in the work of the farm as unpaid

labour); and

(3) other holdings with no unpaid labour or which are not included in the other two groups

(e.g. legal persons).

The results show that, on average, non-family farms generated higher FNVA than family

farms, with income disparities particularly visible in the EU-N13 and, to a lesser degree, in

the EU-15. The disparities across and within the two groups of Member States mainly reflect

differences in farm size. In the EU-N13, holdings classified as ‘other’ had the highest levels

of FNVA. Income in large commercial farms in the EU-N13 significantly exceeded that

generated by the corresponding group of holdings in the EU-15 (EUR 146 500 as compared to

EUR 85 700). On the other hand, the income of family farms was on average significantly

higher (EUR 29 700) than that of their EU-N13 counterparts in the EU-N13. On average,

family farms had the lowest FNVA levels in Europe of all the organisational forms in each

EU group.

19

Figure 1.9: FNVA by EU group and organisational form in 2013



When FNVA is calculated by AWU, the income of non-family farms still tends to be higher

that of family farms across different EU groups (see Figure 1.9). However, in this case

partnership farms show higher values than the ‘other’ types of farms (i.e. legal entities) except

for farms in the EU-N13. In some of the new Member States (Slovakia, Czech Republic),

legal entities are a more prevalent organisational form of farming, usually operating large

scale farming and generating a higher income per labour unit than partnership farms. In

general, FNVA per AWU is greater in the EU-15 than in the EU-N13 irrespective of the

organisational type of farm. This can be partially explained by the larger labour force

employed by holdings in the new Member States.

Figure 1.10: FNVA per AWU and remuneration of family labour per FWU by EU group

and organisational form of the holding, 2013

(in EUR)


20

1.2. Distribution of income

Agricultural income varies considerably across farms as depicted by the ‘box-plots’12

in

Figure 1.11. The general pattern shows that a high proportion of farms have a relatively low

income level per worker, while a small proportion of holdings have a very high income level

per worker. For instance, the average FNVA per AWU in the EU-15 stood at around EUR

27 000 in 2013. However, while 10% of farms had an income per worker of more than

EUR 53 400, 50% recorded an FNVA per AWU below EUR 14 800.

Average income per worker in the EU-N13 remained significantly below the EU-15 level.

The mean value of EU-N13 is in the upper 25% of data, which means that these box-plots are

also skewed to the top (towards higher values). While EU-N13 average income per worker

stood at around EUR 7 600, 50% of holdings had an income per worker of less than

EUR 3 200.

Figure 1.11: Distribution of FNVA per AWU by EU group in 2013

(in EUR/AWU)


Figure 1.12 shows developments in income distribution for the EU as a whole in 2004-2013.

Until 2007, income levels in the Europe were gradually increased, as did average farm income

per AWU. It should be noted also, that 2007 was an exceptionally good agricultural year. Any

reduction of the FNVA per AWU in EU average or in EU-N13 is influenced by the inclusion

of 2 new Member States into the calculation in 2007, such as Romania and Bulgaria. From

2007 to 2009, the average level of income decreased, since the economic crisis prevailed.

12 In the box plots, the inter-quartile range (between 25 % and 75 % of farms) is indicated by the yellow box;

the limits of 10% of farms and 90% of farms correspond to the end of lines (whiskers); the median (50% of

farms) is the line crossing the yellow boxes, and the mean is shown by the ‘+’ sign.

21

The box-plots show that income in most farms fell in the same period. The results shown by

the Gini coefficients (Figure 1.14.) help us understand that some farms were able to maintain

high incomes because the inequality of income distribution deepened in 2009.

This cannot be seen from the box-plots alone, which show only 80% of farms and exclude the

upper and lower 10% of farms. The impact of the sizeable drop in agricultural output prices is

visible in the 2009 data, and explains the significant narrowing of the distribution of income

per AWU. After 2009, an upward tendency can be seen, leading once again to a wider

distribution of average income per worker in 2010, 2011 and in 2012. In 2013 the average

income per worker again fell (by -4.6%), with the upper whisker of the box-plot showing that

the upper 10% of farms recorded less income (average per farm) than in 2012.

Figure 1.12: Distribution of FNVA per AWU by year

(in EUR/AWU)


22

Figure 1.13: Distribution of FNVA per AWU by type of farming in the EU-28 in 2013

(average in EUR/AWU)


Figure 1.13 shows the distribution of FNVA/AWU by type of farm in the EU-28 in 2013.

In general terms, income distribution remains asymmetrical within each of the eight sectors

represented in the FADN (i.e. a small proportion of farms have very high income and a large

proportion of farms have a low income13

).

The degree of these differences varies greatly across the different types of farming. Farms

specialised in granivores show the most pronounced differences between the mean and

median values of FNVA/AWU. The distribution of FNVA/AWU is also highly uneven for

dairy farms and field crop farms (i.e. sectors with a larger inter-quartile range for

FNVA/AWU). For mixed farms, the best performing 25% of farms have a larger impact on

the average than the remaining 75% (their mean value is outside the box).

The trend in the distribution of FNVA/AWU over time varies from sector to sector. As shown

in Figure 1.14, the distribution of FNVA/AWU for specialised dairy farms became

increasingly asymmetric over the period 2005-2007.

13 Within a given sample, a single outlier will actually affect the average but will have no impact on the

median.

23

In 2007, income discrepancies were particularly pronounced, and were accompanied by a

significant increase in mean and median levels. In 2008 and 2009, the degree of asymmetry

decreased, as did mean and median income. These developments were predominantly driven

by increasing input prices in 2008 and the 2009 decrease in milk prices. From 2010 to 2011,

FNVA/AWU increased, with the mean income per worker approaching almost its 2007 level

due to a significant recovery in prices and output during this period. In 2012, the income

distribution became smoother as the upper 10% of farms registered a lower average income

than 2011, and the mean and median levels decreased. In 2013 the income gap between the

upper and the lower 10% of farms increased again, while even the mean value increased,

again reaching the 2011 level.

Figure 1.14: Distribution of FNVA/AWU of dairy farms in the EU-15 by year

(in EUR)


24

Figure 1.15: Distribution of FNVA/AWU of field crop farms in the EU-15 by year

(in EUR)


Figure 1.15 presents the average FNVA/AWU of specialised field crop farms in the EU-15.

The income distribution fluctuated in 2004-2013, with the first high point in 2007. The

income peak was due to the fact that the 2007 agricultural year was marked by very sharp

increases in the prices of many agricultural commodities, both in the EU and on world

markets.

In the following two years (and especially in 2009), FNVA/AWU fell below the 2006 level,

and the income distribution narrowed. In 2010-2011, it almost returned to its 2007 level, and

income distribution became widened again. This recovery was the result of higher cereals

prices and volumes in 2010-2011. In 2012, the boxplot shifted towards the higher income

levels. The average income has increased while the lowest income level remained nearly

stable. Consequently, farms specialised in field crops had higher average income compared

to 2011 and income inequality increased. As figure 1.15 presents, the inter-quintile became

shorter in 2013 and at the same time average income moved closer to the median. The upper

25% of farms recorded lower income, while the lower income level remained almost

unchanged. Therefore, the income distribution shifted slightly again into the direction of

equality. In 2013, producer prices for most of the crops fell in real terms which resulted in a

decline in value of the crop production (except of potatoes, fruits).

25

For farms specialised in granivore production (Figure 1.16), average FNVA/AWU fell to a

low level in 2007 and 2008, as the dampening effect of extremely high feed prices more than

outweighed the favourable impact of higher output prices. The median and mean values

gradually started to increase slightly after reaching their lowest point in 2008, in parallel with

decreasing income inequalities. In 2012, the best performing 10% of farms achieved a

significantly higher level of income, pushing up the mean value and causing income

distribution to widen again. This increase can be explained by a growth in volume and the

increase in producer prices (particularly for pork). High feed costs in the first half of 2013

were the main drivers for low output. Pig meat production declined by 1.3% in 2013 which

was partly compensated by an increase in poultry production for farms specialised in

granivores. These market trends are apparent from the income distribution as well. The upper

25% of farms achieved lower income levels, pushing the mean and the median values down

compared to the level achieved in 2012.

Figure 1.16: Distribution of FNVA/AWU of granivore farms in the EU-15 by year

(in EUR)


26

Figure 1.17 shows the distribution of income (FNVA) in the labour force (AWU) in the

EU-28 in 2013 using a Lorenz curve.14

In 2013, approximately 26% of the farm labour force

had a negative cumulated proportion of income.

The Lorenz curve shows that income is unevenly distributed in the labour force:15

75% of the

labour force generated approximately a little more than a quarter of the farm income recorded

in the FADN. The remaining 25% of the labour force therefore generated approximately 75 %

of FNVA. Note that FNVA/AWU was negative for around 8% of total AWU in farm

populations surveyed by FADN.

Figure 1.17: Lorenz curve of the distribution of FNVA/AWU in the EU-28 in 2013


An alternative measure of the statistical distribution of income is the Gini index,16

which can

be between 0 and 1. A coefficient of 0 expresses perfect equality of income in the labour

force, while a coefficient of 1 reflects maximum concentration or inequality (with one work

unit capturing all the income in a sector).

Table 1.1 shows that income concentration in the EU-15 is typically lower than in the

EU-N13. Although comparisons between groups should be made with caution, the observed

differences partly reflect differences in the structure of the farm sector. For instance, due to

generally higher thresholds in the EU-15, the field of observation in the FADN does not

include the lower economic size classes as it does in the most EU-N13 countries.

14 In drawing the Lorenz curve, the income estimates are sorted in ascending order. Each observation is

weighted according to the weighting factor of the farm and the number of workers employed.

15 If income were equally distributed among the labour force, the Lorenz curve would become a straight line

linking the origin to the top right corner of the figure.

16 The Gini coefficient is usually based on the Lorenz curve. It can be thought of as the ratio of the area that

lies between the line of equality and the Lorenz curve over the total area below the line of equality.

27

Looking at the development of the coefficient over time within each EU group, income

concentration has increased in the EU-15 from 2004 to 2011. It reached its peak in 2011 and

was very close to this value also in 2009 too. Income inequality fell slightly in 2012, but

intensified again in 2013, reaching the 2009 level.

In the EU-N13, there were minor fluctuations in income distribution over the reference

period. The economic crisis in 2009 seems to have increased income concentration in all

EU groups, but the EU-N13 was particularly affected by unequal income distribution. The

highest income concentration was seen in 2007 and 2009. With the economic recovery,

income inequality narrowed in 2010, however there was still a slight concentration in 2011.

Income distribution has remained at the same from 2011 to 2013.

Table 1.1: Development of the Gini coefficient of FNVA per AWU by EU group

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

EU15 0.55 0.55 0.54 0.55 0.59 0.62 0.60 0.63 0.60 0.62

EU-N13 0.68 0.69 0.63 0.72 0.69 0.72 0.67 0.68 0.68 0.68 Source: DG AGRI EU-FADN

28

1.3. Income components

Results by EU group

Figure 1.18 shows the composition of farm receipts and expenses by EU group in 2013. In our

calculation total receipts represent the income received from the total output and from the

balance of subsidies (current operations and on investments) and taxes. When calculating the

expenses, the estimated remuneration of own production factors are also taken into account,

which means that by comparing farm receipts with expenses including the cost of own

resources, we talk about farms' profit. In the previous chapters the cost of own production

factors was not taken into account.

On average, expenses were higher than receipts for both farms in the EU-15 and in the

EU-N13. On the income side, average receipts per farm in the EU-28 stood at EUR 81 000, of

which total output represented EUR 70 300 (87%) and subsidies17

EUR 10 800 (13%). These

aggregated figures hide large differences between the EU groups, both in absolute and relative

terms: the average farm receipt in the EU-N13 was roughly four times lower than in the

EU-15 and 2.5 times lower than in the EU-28. In relative terms, subsidies accounted for more

than 17% of average farm receipts in the EU-N13, compared to roughly 12% in the EU-15.

Figure 1.18: Income components per farm by EU group in 2013



17 Subsidies include the sum of net current and investment subsidies. They include EU coupled and decoupled

payments less favoured area (LFA) payments, rural development payments and national aid. Net means the

balance of current subsidies and taxes plus the balance of subsidies and taxes on investment.

29

On the cost side, average farm expenses (including an estimated remuneration of own factors)

totalled EUR 83 700 in the EU-28. While this aggregated figure again reflects highly

contrasting price levels in the EU groups, the cost structure as such has been found to be

broadly similar across all countries. Intermediate consumption18

represented 53% of the total

expenses.

Depreciation and expenses relating to external factors19

accounted for approximately 11-12%

respectively. The remainder 24% was accounted for by the opportunity costs of own factors

(family labour, own land and own capital). While the EU-15 shows a distribution of cost

factors similar to that of the EU-28, for farms in the EU-N13, intermediate consumption

accounts for a smaller part of total farm expenses (51%), while opportunity costs of own

factors account for a larger part of total expenses (27%).


In 2013, farms specialised in granivores and horticulture on average showed a positive

balance of receipts and expenses as shown in Figure 1.19. The expenses and receipts of dairy

farms were more or equal. Farms specialised in granivores had the highest output of all farm

types in the EU-28 (EUR 278 600). On the other end of the spectrum, farms specialised in

permanent crops other than wine generated the lowest output (EUR 30 000).

In terms of average subsidies per holding, farms specialised in field crops benefitted most

from subsidies (EUR 15 700 per farm), followed by grazing livestock and dairy farms

(EUR 14 200 and EUR 14 100 per farm, respectively). On the other hand, the horticulture

sector received, on average, the lowest amount of subsidies (EUR 2 900 per farm). The most

subsidised field crop farm received more than five times more subsidies than the least

subsidised horticultural farm.20

These discrepancies in subsidies across sectors still reflect the

past features of the CAP, which in particular provided support for the production of cattle and

field crops. It can be noted, however, that horticultural farms have significantly higher

receipts than field crop or grazing livestock farms and might therefore be less reliant on

public support. It should also be underlined that an average field crop farm is much larger

than a horticultural farm. Subsidies mentioned above were calculated per farm and not per

hectare.

18 Intermediate consumption includes specific costs (including inputs produced on the holding) and overheads

arising from production in the accounting year. Specific costs can stem from seeds, seedlings, fertilisers,

crop protection products, feed for grazing stock and granivores etc.

19 Expenses for external factors include wages, rent and interest paid.

20 This observation is based on the absolute value of subsidies for field crop and horticultural farm disregarding

the differences in the farm size of these two types of farming.

30

Figure 1.19: Income components per farm by type of farming in 2013


Source: DG AGRI EU- FADN. Note: Receipts (Rec), Expenses (Exp)

The cost structure varies markedly between sectors, reflecting differences in farm size,

technological processes and input prices.

Granivore farms (typically large in economic size, with technological processes involving a

high turnover of animals) had the highest costs for intermediate consumption due to feed costs

(driven by higher prices for feeding stuffs),21

both in absolute and in relative terms

(EUR 205 900 per farm annually or nearly 72% of total expenses).

On the other hand, intermediate consumption on average totalled EUR 11 500 (or less than

31% of total costs) for other permanent crop farms. Looking at the costs of depreciation,

farms specialised in other permanent crops spent most on depreciation (20% of total

expenses) while pig and poultry farms (granivores) spent the least (8%).

The proportion of external factors (wages, rent and interest paid) of total costs was

particularly high in the horticulture (22%) and wine sectors (19%), mainly due to the high

cost of external labour. On the other hand, other grazing livestock and granivore farms had

the lowest proportion of expenditure on external factors (around 8%). In absolute terms,

horticulture holdings had the highest external factor costs (EUR 36 400), while farms

specialised in other grazing livestock, mixed and other permanent crops had the lowest

(less than EUR 6 000). Finally, the estimated costs of own production factors (family labour,

own land and own capital) as a proportion of total costs were highest for other permanent crop

farms (42%) and lowest for granivore farms (11%).


http://ec.europa.eu/agriculture/statistics/agricultural/2013/pdf/full-report_en.pdf

https://de-mg6.mail.yahoo.com/neo/b/message?sMid=0&fid=Inbox&fidx=1&sort=date&order=down&startMid=0&filterBy=&ac=RFd36Yj0Xk4rePlZxJF_t3SGy3A-&.rand=http://ec.europa.eu/agriculture/statistics/agricultural/2013/pdf/full-report_en.pdf

31

1.4. Return on assets

Return on assets (ROA) measures the

effectiveness of a company’s assets in

generating income. It is defined as the

ratio of net income over total assets,

where the net income is defined as the

sum of FNVA and investment subsidies

minus wage costs, rent paid and the

opportunity costs of own labour.


The ROA of an average farm in the EU-28 in 2013 was 2.0%. This was similar to 2012 and

up from 1.8% in 2010 and 0.4% in 2009. Holdings in Bulgaria, Hungary and the

Czech Republic had the highest ROAs, mainly due to the relatively low levels of opportunity

costs of own labour (except for the Czech Republic) and fixed asset values (such as land and

quotas). In 2013, six Member States registered a negative ROA, with the lowest value was

recorded in Croatia (-4.8%). In 2013, Slovenia, Sweden, Finland, Slovakia and Ireland had

the lowest ROAs in the EU (see Annex 8 for more details).

Figure 1.20: Rate of return on assets by Member State in 2012-13




Granivore, horticulture, dairy farms and field crop farms had ROAs above 2.0%, but this

figure dropped below 1.5% for wine and other permanent crops holdings. Farms specialised

in grazing livestock and mixed crop and livestock farms had a negative ROA, which shows

that they invested substantial capital into their production while simultaneously receiving

little income (see Figure 1.18).

ROA=

FNVA

+ Balance of investment subsidies and taxes

- Wages paid

- Paid rent

- Capital costs

- Opportunity costs of family labour

Total assets

32

This result could be linked to the slight decrease in production volumes (especially in case of

sheep meat), partly due to the decrease in livestock numbers (beef sector) and producer prices

for some animal products (sheep meat).

Figure 1.21: ROA in the EU-27 by type of farming in 2013



Trends by EU group

As shown in Figure 1.19, ROA fluctuated not only across EU groups but also over time for

each group. It fell drastically in all countries in 2009, but started to recover for all EU groups

from 2010, albeit with varying intensity.

In the EU-15, the peak was in 2007 (2.8%) while the lowest level of ROA was in

2009 (0.5%). The value nearly quadrupled in 2010, and ROA remained at its 2010 level until

2013 when it began to decrease again (1.4%). In the EU-N13, ROA was highest in

2004 (2.9%). Since then the value has declined due to the decrease in net income (by -6%)

reaching its lowest point in 2009. The recovery process started in 2010 with ROA reaching

almost its highest level in 2011 (2.8%) when the income level increased significantly. In 2013

the percentage of net income relative to farms’ total resources in the EU-N13 fell again to the

2010 level (1.6%), since asset value increased while net income started to decrease again from

2011. In relative terms, the highest ROA among all EU groups was recorded in 2004 in the

EU-N13, which actually masks the fact that in absolute terms both net income and asset value

were lower than in 2013; only their ratio was high compared to other years and EU groups.

33

Figure 1.22: Development of the ROA by EU group



34

2. IMPORTANCE OF DIRECT PAYMENTS FOR FARM INCOME

This chapter analyses the impact of direct payments on the income of European farmers. Two

economic indicators are used to express income: farm receipts and farm net value added

(FNVA). In our calculations, direct payments include total subsidies for operations linked to

the production of crops and livestock as well as decoupled payments. Farm receipts include

the total output and the balance of subsidies and taxes arising from current activity of the farm

in the accounting year.

2.1. Proportion of direct payments to total receipts


The average amount of direct payments received per holding in 2013 was EUR 8 360. The

proportion of direct payments to total receipt (output plus net current and investment

subsidies) in the EU-28 stood at 10.3%. This proportion varies among Member States. The

total receipts of Irish, Greek and Slovakian farms are proportionately most dependent on

subsidies (which represent 15-20% of their total receipts). The high proportion of direct

payments can attributed to the extensive farming practice in these countries with relative large

areas of land and lower added value. This does not necessarily mean that the production is not

efficient in terms of capital invested or per labour unit for instance, only that the added value

is low in comparison to the direct support. Finally, direct payments account for the lowest

proportion of total receipts in the Netherlands (close to 2.8%), where sectors with a lower

proportion of direct payments to total receipts, such as horticulture (higher value-added crops)

and pig and poultry production (more intensive livestock farming), are a significant part of

total agricultural output.

Figure 2.1: Proportion of direct payments in relation to the total receipts by Member

State in 2013



35


As already stated, the proportion of direct payments in farm receipts varies markedly across

types of farming, mainly reflecting the differentiated emphasis towards certain types of

farming in the Common Agricultural Policy. In addition, in the EU-15 the historical model of

the CAP was characterised by asymmetrical direct support across sectors — a feature which

has gradually been reduced following the 2003 reform. Figure 2.2 shows that direct payments

account for the highest proportion of total receipts in grazing livestock farms (16.9%) and

field crop farms (15.5%). On the other hand, they represent only a very limited part of total

receipts in the wine and horticulture sectors (2.8% and 1.1%, respectively).

Figure 2.2: Proportion of direct payments in relation to total the receipts by type of

farming in 2013



2.2. Proportion of direct payments to FNVA

The role of direct payments play in sustaining farm income becomes even more apparent

when we look at them in relation to FNVA (see Annex 3). Consequently, if all other factors

remain equal, changes in direct payments have a much greater impact on FNVA than on total

farm receipts.


In 2013, direct payments on average accounted for nearly 33% of FNVA in the EU-28, up

from 31% in 2012 (Figure 2.3). This slight increase was due to a marginal decrease in FNVA

while direct payments remained nearly stable in 2013. The proportion of direct payments to

FNVA was highest in Finland (79%), followed by Slovenia (77%), Slovakia (69%) and

Latvia (57%). By contrast, direct payments accounted for only 10% of FNVA in the

Netherlands, which showed that the country was more focused on its highly profitable and

less subsidised sectors, such as horticulture and pig and poultry production.

36

Map 2.1 shows the regional differences in the proportion of direct payments to FNVA. The

lowest figure was seen in Hamburg (1%), followed by Liguria and Comunidad Valenciana

(2% and 6%, respectively).

Figure 2.3: Proportion of direct payments to FNVA by Member State in 2013



Map 2.1: Proportion of direct payments to FNVA by FADN region in 2013


37


The proportion of direct payments to FNVA also fluctuates markedly depending on the type

of farming (Figure 2.4). In particular, direct payments represent a substantial part of FNVA

for grazing livestock, mixed and field crop farms due to the average farm size of these and the

historical orientations of the CAP. Grazing and mixed farms recorded below-average FNVA,

while field crop farms had the highest average amounts of direct payments in 2013, which

resulted in the highest proportion of direct payments to FNVA in these types of farming. On

the other hand, direct payments play only a limited role in sustaining income within the wine

and horticulture sectors, with incomes above the EU average FNVA in 2013.

Figure 2.4: Proportion of direct payments to FNVA by farm type in the EU-28 in 2013



38

3. CHARACTERISTICS OF ANALYSED FARMS

3.1. Financial structure

This chapter analyses the financial structure of agricultural holdings within the FADN field of

survey with respect to two main dimensions (country and type of farming) and using several

financial indicators derived from farm balance sheets.

3.1.1. Total asset value

Total assets are the property of the agricultural holding and comprise current and fixed assets.

Current assets in the FADN include non-breeding livestock, stock of agricultural products and

other circulating capital, holdings of agricultural shares, and amounts receivable in the short

term or cash balances in hand or in the bank. Fixed assets are agricultural land, permanent

crops, farm and other buildings, forest capital, machinery and equipment, and breeding

livestock.

Long-term developments by EU group

Figure 3.1 shows that the value of total assets has been increasing in both the EU-15 and the

EU-N13. In the EU-15, the average value of total assets rose by more than 43% in the

2004-2013 period and by 20% in the EU-N13. However it should be emphasized, that here

was a break in the time series between 2006 and 2007 due to the accession of Romania and

Bulgaria. This had an impact on FADN farms and caused a temporary decline in the average

total asset value and in the liabilities for the EU-N13.

Figure 3.1: Long-term developments in the value of total assets (TA) and total

liabilities22

(TL)



22 The concept of total liabilities will be discussed in section 3.1.2.

39


As shown in Figure 3.2, the value of the total assets of an average farm in the EU-28 stood at

EUR 320 800 in 2013. However, this average masks sizeable variations across Member States,

reflecting differences in the structure of national agricultural sectors.

On average, Danish and Dutch farms held the highest amounts of assets (around

EUR 2 520 000 and EUR 2 300 000, respectively), reflecting the very high land prices and the

importance of the types of farming that typically need considerable investment, such as milk,

granivores and horticulture production. In contrast, farms in Romania and Bulgaria had the

lowest total asset values (below EUR 100 000) as they are characterised by less capital-

intensive types of farming and their farms have a smaller average economic size. These low

values of total assets were partly due to the lower land prices.

Figure 3.2: Average total asset value per farm by Member State in 2013




Granivores and dairy farms have typically held the highest amounts of total assets — more

than three times the asset value of farms specialised in mixed (crop and livestock) farming,

which had the lowest values. These disparities are partly due to differences in capital intensity

across sectors.

40

Figure 3.3: Average total asset value by type of farming in the EU-28 in 2013



3.1.2. Total liabilities


In line with the general trend for total asset values (see Figure 3.1), total liabilities have also

increased. In the EU-15, the average value of total liabilities increased by 51% in the

2004-2013 period, while in the EU-N13 it decreased by 22%, what however reflected mainly

a changing composition of this country grouping. In the new Member States total liabilities

were higher until 2009 and then subsequently, stagnating until 2013. It should be noted that

since 2007 three new countries joined the EU – Bulgaria, Romania and Croatia. In the

surveyed farm population of these countries liabilities were very low and at the same time

especially in Romania the weight of farms were high influencing significantly the level of

liabilities in EU-N13. Without these three new Member States the total liabilities would have

increased by 51% for EU-N10 from 2004 to 2013. Consequently this decreasing tendency in

total liabilities for EU-N13 is influenced by including the 3 new Member States to those 10

that joined in 2004 to the EU.

In the EU-28, average liabilities per agricultural holding rose to EUR 47 900 in 2013, up from

EUR 47 700 in the previous year. As illustrated in Figure 3.4, both the total amount of

liabilities and their composition show wide variations across Member States. In absolute

terms, the Danish and Dutch farms had, on average, the highest total liabilities within the EU.

In contrast, total liabilities per farm remained very low in many Mediterranean Member

States, which may reflect difficulties farmers had in accessing credit markets in these

countries. However, these very low levels could also have resulted from different accounting

practices, where liabilities are typically included in farmers’ private accounts rather than farm

accounts.

In relative terms, agricultural holdings relied mostly on medium- and long-term loans, which

represented more than 90 % of total liabilities in Belgium, Croatia, Italy, Slovenia, Cyprus,

Denmark and Finland. Short-term loans to finance agricultural activities were prevalent in

Hungary (63%), Portugal and Slovakia (60% each) and Lithuania (56%).

41

Figure 3.4: Composition of liabilities per farm by Member State in 2013




As shown in Figure 3.5, farms specialised in granivores, horticulture and dairy had, on

average, the highest total liabilities (EUR 209 100, EUR 93 900 and EUR 91 300,

respectively). Permanent crop holdings recorded the lowest liabilities in 2013 (EUR 7 300),

Medium- and long-term loans were the dominant kind of liability for all farm types. Short-

term loans only played a significant role in wine holdings, where they accounted for around

48 % of total liabilities.

Figure 3.5: Composition of liabilities per farm in the EU-28 by type of farming in 2013



42

3.1.3. Development of farm net worth


Farm net worth is defined as the difference between total assets and total liabilities at the end

of the accounting year. In 2013, the average farm net worth stood at approximately

EUR 272 900 in the EU-28 (+2% compared to 2012). The average net worth per agricultural

holding was highest in the UK (EUR 1 554 000), the Netherlands (EUR 1 437 100) and

Denmark (EUR 995 600) (Figure 3.6). This shows the importance of the granivore and milk

sectors, which are characterised by above-average net worth values per farm (Figure 3.7).

Farms in Romania (EUR 39 000) and Bulgaria (EUR 61 400) had the lowest values.

Figure 3.6: Farm net worth by EU group and Member State in 2012 and 2013



Figure 3.7: Farm net worth in the EU-28 by type of farming in 2013



43

Farm net worth for mixed farms (crops and livestock) was lowest, and remained significantly

below the EU-28 average, reflecting the low asset value of these farms in comparison with

other sectors.

3.1.4. Solvency

In this analysis, solvency is measured using the liabilities-to-assets ratio, which shows the

percentage of an agricultural holding’s assets that are financed through debt. This gives an

indication of a farm’s ability to meet its obligations in the long term (or its capacity to repay

liabilities if all assets are sold). The results should be interpreted with caution as a high

liabilities-to-assets ratio is not necessarily a sign of a financially vulnerable position. In fact, a

high ratio could also be an indication of a farm’s economic viability (i.e. its ability to access

outside financing), though there is certainly a threshold beyond which indebtedness will

compromise a farm’s financial health.

A high liabilities-to-assets ratio typically reflects heavy recourse to outside financing

(i.e. taking out loans). While the higher leverage (the amount of debt used to finance assets)

helps a farm to invest and typically increases its profitability, this comes at a greater risk as

leveraging magnifies both gains (when investment generates the expected return) and losses

(when investment moves against the investor23

).

As is the case for other financial indicators used, the liabilities-to-assets ratio varies

significantly across Member States and in some cases even within Member States, as shown

on Map 3.1. Farms in Denmark, France and the Netherlands had the highest

liabilities-to-assets ratio (at 60%, 39% and 36%, respectively). The lowest average solvency

levels were in many of the Mediterranean Member States, as well as in Romania and Ireland

(below 3%).

As has already been stated, these very low levels of indebtedness and by extension of

solvency could stem from the fact that in these Member States liabilities are typically not

included in the farm accounts but in farmers’ private accounts. However, in the case of

Ireland, low solvency levels mainly reflect relatively high asset values. As shown in Figure

3.8, the level of solvency also varies markedly across farm types, with farms specialised in

granivores, horticulture, and dairy production having the highest liabilities-to-assets ratios.

23 For example due to unfavourable weather conditions or outbreaks of animal diseases.

44

Map 3.1: Average liabilities-to-assets ratio per farm by FADN region in 2013


Figure 3.8: Farm solvency in the EU-28 by type of farming in 2013



45

3.1.5. Current and fixed assets


Fixed assets24

account for the largest proportion of total assets in all Member States (see

Figure 3.9). In particular, total farm assets in Greece, Ireland, Slovenia and Malta consist

almost exclusively of fixed assets (more than 90%). Farms there are mainly family-run and

may prefer the low investment risk of fixed assets accompanied by their reasonable and stable

profitability. The proportion of fixed assets was lowest in Slovakia (46%), where the farms

are run mainly by companies whose operation relies more on current assets.

Figure 3.9: Composition of assets by Member State in 2013



Figure 3.10: Composition of fixed assets by Member State in 2013



24 Fixed assets include agricultural land, farm and other buildings, forest capital, machinery and equipment,

and breeding livestock.

46

The composition of fixed assets across Member States depends on the structure of the

agricultural sector. As shown in Figure 3.10, ‘land, permanent crops and quotas’ was the

largest component in most Member States in 2013. In particular, this category made up more

than 80% of fixed assets in Ireland and the United Kingdom. On the other hand, ‘buildings’

were of major importance in Austria, Slovakia, the Czech Republic and Romania (ranging

from 41% to 48%). ‘Machinery’ accounted for the largest proportion of fixed assets in

Lithuania (46%). Finally, ‘breeding livestock’ was the smallest component of fixed assets in

all Member States (ranging from 15% in France to 1.8% in Italy).

However, it should be stressed that accounting practices vary markedly across Member States.

For instance, quotas are not marketable in some countries (e.g. France), so they are not

recorded as a farm’s separate asset, although their value is partly included in the land value.

Consequently, the value of the ‘land, permanent crops and quotas’ component is

underestimated compared to countries with marketable quotas (e.g. the Netherlands). There

are also differences in how land-related data is recorded. For example, in France, farmers in

some cases set up holdings that rent land to their members, and in this case the value of the

land is not included in these holdings’ total assets. This accounting practice thus increases the

relative proportion of other assets.


As shown in Figure 3.11, fixed assets accounted for 80 % of total assets in 2013. This

proportion varied slightly among types of farming, ranging from 84% in specialised dairy

farms to 64% in wine holdings.

Figure 3.11: Composition of assets by type of farming in 2013



For the composition of fixed assets, Figure 3.12 shows that ‘land, permanent crops and

quotas’ was the largest component in all farm types, though the proportion varied from more

than 80% in farms growing other permanent crops to about 50 % in granivore farms. On the

other hand, granivore farms had the largest proportion of ‘buildings’ (32%) and farms

growing other permanent crops had the lowest (10%).

47

Farms specialised in horticulture recorded the largest proportion of ‘machinery’ in fixed

assets (about 17%), while the figure was only around 10 % for farms growing other permanent

crops. Finally, ‘breeding livestock’ accounted for the highest proportion of total assets in

grazing livestock and dairy farms (broadly 9%).

Figure 3.12: Composition of fixed assets by type of farming in 2013



3.2. Labour

This section analyses the structure of the labour force employed by EU farms, focusing on the

average size of the labour force employed per farm, its composition and the wages paid. The

results show that the proportion of non-family labour in the total workforce is gradually

increased in the EU-15 in the 2004-2013 period, reflecting structural changes and increasing

farm sizes. The opposite trend was observed in the EU-N13 in the same period. This tendency

is again influenced by three new countries that joined the EU in or after 2007. Especially in

Romania but also in Croatia, family labour is the most prevalent form in agriculture. Due to

its farm population and its weight in FADN, Romania has a significant impact on the group of

EU-N13. In addition, there is significantly higher variability across EU-N13 Member States,

due to the predominance of very large farms often organised as legal entities in many eastern

European countries. In some Member States in both in the EU-15 and the EU-N13, the

proportion of family labour is higher than the EU-28 average. In terms of the proportion of

unpaid working hours, Slovenia, Ireland and Austria take the lead (about 95 %), while the

proportion is around 50 % in Denmark and in the Netherlands, showing balanced labour

distribution between family and non-family labour hours. In the EU-N13 the highest

proportion of unpaid working hours (89 %) is in Romania. Slovakia (5 %) and the

Czech Republic (22 %) are at the other end of the scale, due to the predominance of very large

farms, which are often organised as legal entities.

48

3.2.1. Labour force


The average total labour input of holdings stood at 1.5 AWU in 2013 in the EU-28. This was

virtually the same as the previous two years, although it has decreased (by -14 %) compared to

2007. The labour input in Romania has almost halved from 2007 to 2013. As shown in Figure

3.13, it varied considerably across countries, ranging from 15.5 AWU in Slovakia to

1.1 AWU in Greece. Labour input on Slovak (15.5 AWU) and Czech (6.6 AWU) farms was

significantly higher than on farms in the remainder of the EU, reflecting the predominance of

very large non-family agricultural holdings in their agriculture sectors.

Figure 3.13: Labour input per farm (in AWU) by Member State in 2013



Figure 3.14 shows that labour input by type of farming was fairly close to the average of

1.5 AWU per farm in all sectors except horticulture (where labour input was more than twice

as much) and for granivore farms (where the AWU per farm was 23 % higher than the

average).

Figure 3.14: Labour input per farm (in AWU) by type of farming in the EU-28 in 2013


49


Traditionally, a significant part of the labour force employed in agriculture is family labour.

Family labour represents a proportion of total labour force25

represents the prevalent form of

labour in most Member States, with the exception of Slovakia, the Czech Republic, Hungary,

Estonia and Bulgaria. As Figure 3.15 shows, the proportion of paid labour in the total labour

force in these five countries was higher than 50 % — sometimes significantly so.

Figure 3.15: Proportion of working hours of paid and unpaid labour on farms by

Member State in 2013



As shown in Figure 3.16, the proportion of paid labour is highest in horticulture holdings,

reflecting the typical recourse to seasonal workers. The proportion of paid labour is typically

lowest in grazing livestock, mixed (crops and livestock), and dairy farms.

Figure 3.16: Proportion of working hours of paid and unpaid labour in the EU-28 by

type of farming in 2013


25 The proportion is expressed as follows: time worked in hours by unpaid labour input (generally family) in the

holding divided by the time worked in hours by the total labour input in the holding.

50

3.2.2. Remuneration of farm workers

Results by EU group

As shown in Figure 3.17, the nominal hourly wage increased in both EU-15 and the EU-N13.

In the EU-15, the average nominal hourly wage rose by 25 % between 2004 and 2013, from

EUR 8.2 to EUR 10.3. In the EU-N13, it stood at EUR 3.3 in 2013, up from EUR 2.2 in 2004

(an increase of some 52 %) despite including Romania and Bulgaria in 2007. The average

EU-28 nominal hourly wage stood at EUR 7.4 in 2013, compared to EUR 7.3 in 2012 an

increase of about 1.7 % over this period. The average nominal hourly wage in the EU-15 was

approximately three times higher than in the EU-N13 in 2013. Changes in the nominal wage

compensated for price increases over this period, so that the real hourly wage rose by around

0.3 % between 2012 and 2013 (EU-28 HICP inflation stood at around 1.4% during this time).

Figure 3.17: Long-term developments in average nominal wages




As Figure 3.18 shows, the average hourly nominal wage varies widely across the EU-28. In

2013, it was highest in Denmark (EUR 23.2) and lowest in Romania (EUR 1.7). Note that

wages in the EU-N13, as well as in Greece and Portugal, were below the EU-28 average

(EUR 7.4). It is also visible, that in 2007 there was a break in the time series. Due to the

accession of Romania and Bulgaria to the EU, the average nominal wages in EU-28 went

down, while it remained nearly stable for EU-15. Map 3.2 shows that the level of wages was

highest in north-western Europe: Denmark (EUR 23), Sweden (EUR 21), the French

Champagne-Ardenne region (EUR 18) and the Netherlands (EUR 16). At the other end of the

scale were Romania and Bulgaria with the lowest average wages per hour (around EUR 2).

51

Figure 3.18: Average nominal wages of paid labour in 2013

(EUR/hour)


Map 3.2: Average nominal wage by FADN region in 2013


52

3.3. Land

For most farm types, access to agricultural land is a precondition for economic activity. This

subsection analyses the amount of agricultural land available per farm, trends in the

ownership of land and the cost of renting land.

3.3.1. Farm size

While it is already clear from this report that the structure of farms varies significantly across

Member States, one of the most telling indicators of these differences is the physical size of

farms, measured by the average amount of agricultural land per farm. As shown in Figure

3.19, farms represented in the FADN are on average largest in Slovakia (595 ha), followed by

the Czech Republic (233 ha) and the UK (166 ha). Farms are smallest in Greece, Cyprus

(9 ha) and Malta (3 ha). The EU average was 32.8 ha in 2013, little changed from the

previous year. It should be noted that this average farm size is based on the FADN survey,

which does not cover all agricultural holdings in the EU but only those which due to their size

could be considered commercial. Thus the interpretation and the use of the above-mentioned

average farm size should be treated with caution (see the methodology chapter for more

information).

The average farm size was mostly below the EU-28 average in some of the Mediterranean

countries, in Austria and in some of the Eastern European countries such as Poland and

Romania.

Figure 3.19: Total farm UAA26

by Member State in 2013

(average per farm in ha)

Source: DG AGRI EU- FADN

The average utilised agricultural land area was largest in field crop farms, followed by grazing

livestock farms whereas horticultural farms were the smallest. The average field crop farm

(53 ha) was nearly eight times bigger than the average horticultural farm (7 ha) in 2013.

However, it is important to stress that horticultural farms operate at a much higher intensity,

meaning that the land is a less important determinant of their level of production.

26 Utilised agricultural area (UAA) is the area used for farming.

53

Figure 3.20: Total UAA of farms by type of farming in 2013

(average per farm in ha)

Source: DG AGRI EU- FADN.

3.3.2. Importance of rented land

Structural change is ongoing in the agricultural sector, as reflected by the steadily decreasing

number of farms. Consequently, the remaining active farms tend to get larger as they buy or

rent the land previously used by farms which have ceased farming.

Figure 3.21: Long-term developments in the proportion of rented land in 2013

(average per farm in %)


54

As shown in Figure 3.21, the proportion of rented land in the EU-15 increased from about

52 % in 2007 to 54 % in 2013. This indicates that more than half of the land available on the

EU-15 market is rented rather than purchased.

The proportion of rented land in the EU-N13 fell in 2005 (from 51.9 %) following the

accession year of the 10 Member States. It remained below this figure until 2009. This

increase can be traced back to the EU enlargement in 2007. In the accession year, the

proportion of rented land was only 40% in Romania, but in the coming years it went up to

60%. At the same time the share of rented land was 90% in Bulgaria. The proportion of rented

land was the highest in 2010 but since then it has gradually decreased reaching 53% in 2013.

Note that the averages for the different EU groups mask considerable national and regional

disparities, as shown on Map 3.3. Rented land as a proportion of total UAA is very high in

some regions of France (Picardie: 96 %; Bourgogne: 95 %, Lorraine and Nord-Pas-de-Calais:

93%, Haute-Normandie: 92%), Slovakia (95 %27

), and Bulgaria (Severoiztochen and

Yugoiztochen: 90 %). Conversely, it is below 30 % in many southern European regions such

as Galicia (11%) and Puglia (17%) as well as in Ireland (19 %), Hamburg (22%),

Wales (24 %) and Austria (28 %).

Map 3.3: Proportion of rented land of total UAA by FADN region in 2013


27 This very high proportion of rented land of total UAA reflects the business structure of Slovak agricultural

holdings (i.e. cooperatives renting land from their members).

55

3.3.3. Level of land rents

As land prices are often influenced by factors originating outside the agricultural sector, the

annual rent farmers have to pay for one hectare of land is typically considered the best proxy

for the cost of land. Map 3.4 shows that the level of land rents varies markedly across

EU regions. In 2013, the highest average land rent per ha was in the Canary Islands and the

Netherlands (approximately EUR 1 300 and EUR 780, respectively). Land rents were also very

high in the Hamburg region (EUR 670) and in Denmark (EUR 610). On the other hand, rents

were particularly low in Latvia and Estonia (below EUR 30 per ha) and in many regions with

unfavourable conditions for intensive agricultural production, such as dry and mountainous

areas.

Insofar as the rental value of land reflects land scarcity, its level can be used as an indicator of

the risk of land abandonment. For instance, if land rents are high, it can be assumed that

farming is profitable and that there are enough farmers willing to use the land. However low

land rents indicate that there is little potential for making economically profitable use of the

land. Hence, adverse changes in the economic environment are highly likely to result in land

abandonment.

Map 3.4: Average land rent levels in the FADN regions in 2013


56

Results by farm type

The level of land rent depends on several factors such as the scarcity of land, the degree of

competition between farmers in the local land market and the strength of demand for land in

different sectors. In areas where horticulture or wine production are important, suitable land is

scarce and land rents are much higher than, for example, in areas with extensive grassland.

Similarly, in areas with intensive livestock production, land prices tend to be higher because

additional land is often a precondition for expanding production. Of course, factors such as

the profitability of production, production structures and the institutional setting of land

markets must also be taken into account as they influence the levels of land rents too. This is

mirrored in the average level of land rents per farm type shown in Figure 3.22.

Figure 3.22: Average land rent by farm type in 2013

(in EUR per ha)


Developments in land rent levels by EU group

As shown in Figure 3.23, the level of land rents in the EU-15 increased very gradually over

2004-2013, from EUR 174 per ha to EUR 195 per ha. However, this trend was more

pronounced in the EU-N13, despite a small decrease in 2009: average land rent per hectare

nearly tripled during this period, from around EUR 32 to EUR 92. All in all, average land

rents have gradually increased in the EU since 2007 and stood at around EUR 167 per hectare

in 2013 (+15 %). It should be noted that the land rent figures discussed in this subsection are

averages and do not necessarily reflect prices in new rental contracts (which may be well

above the average level observed in the FADN).

57

Figure 3.23: Long-term developments in land rent levels

(in EUR per ha)


4. CROATIA IN FOCUS

Croatia applied for the EU membership in 2003 and it took 10 years to finish the negotiations

and conclude the ratification process. Finally, on 1 July 2013, the Adriatic country joined the

European Union as its 28th

Member State.

2013 was the first year for Croatia to report in FADN. This data delivery provides an

opportunity to acquire information about the agricultural economy of this country. But before

going at farm-level analysis, let's see first the characteristics of Croatia in general.

About half of the country is a continental area but Croatia has famous and popular coastline

too, with over 1000 islands. The leading sector of the Croatian economy is definitely the

service sector, in particularly tourism and transport. But we should not forget about

agriculture which share in the GDP is around 3.9%28

. More than 83% of the agricultural area

is located in the continental part of the country. In 2013, 79% of the Croatia's land area was

classified as predominantly rural which is more than the EU-28 average of 52%. In these rural

areas lives half of the population (2.1 million).

In the FSS field of survey, there are 157 450 farms which represent the Croatian agricultural

population. The field of observation in the FADN consists of 81 500 farms which covers 52%

of the farms, 91% of the UAA and 93% of the standard output (SO) in the. The data collection

is carried out in two regions (coastal and continental regions) of Croatia. Let's have a look at

some features of the Croatian agriculture from farm-level perspective. EU-28 comparisons

will be also discussed.

28 World Bank national accounts data, 2013.

58

4.1. Economic situation of farms in Croatia

The average Farm Net Value Added per farm in Croatia is approximately as high as it is in

Romania. If we look at the income level per AWU, then it is the lowest (EUR 3 870) among

the 28 Member States. This can be traced back to the high cost of external factors and to the

labour input which is higher than the EU average. The two regions of the country perform

differently.

The average FNVA/AWU in the continental region (EUR 4 560) is twice as much than in the

coastal region (EUR 2 240).

Map 4.1: Farm Net Value Added (FNVA) per Annual Working Unit (AWU) in

Croatia by regions in 2013


After the deduction of the total external factors and by adding the balance of subsidies and

taxes on investments, we get the remuneration of family labour, own land and own capital

which is the farm net income. Looking at the average value of this indicator, Croatia stays at

the bottom of the ranking. Interesting to see that after the deduction of the opportunity cost of

own land and capital, the remuneration of the family labour precedes Slovenia and Slovakia.

In these latter countries, the estimated costs of own land and capital are higher than in Croatia.

This is partly due to the higher assets value in those Member States. In particular the average

land value in Slovakia is by 25% higher than in Croatia.

All income indicators show the above mentioned dualistic characteristic between the coastal

and continental regions, with the biggest difference between the remuneration of family

labour.

59

It seems that after the deduction of the external factors and the estimated cost of own land &

capital hardly anything remains for the remuneration of family labour for farms to be found in

the coastal area (EUR 2 per farm). However in the continental part of the country, the average

remuneration of family labour per farm is still around EUR 1 900. In this respect should be

noted that in the Adriatic part of the country farmers do agriculture as an additional source of

income, mostly to complement their tourism or other activities in which they are primarily

engaged. Farms of this region cannot be regarded fully market-oriented.

If we look at the composition of income then on the cost side, average farm expenses

(including an estimated remuneration of own factors) totalled to EUR 37 200 in Croatia. The

cost structure was slightly different from the EU average. Intermediate consumption

represented only 41% of total expenses in comparison to the 53% in the EU-28. Depreciation

accounted in both cases 11% of total expenses, while the share of the cost of external factors

in total was less (7%) than the EU average (12%).

Figure 4.1 shows that the proportion of external factors (wages, rent and interest paid) in total

costs differed from the distribution of these factors in EU-28. Wages paid are more than

two-thirds of the total external factors (69%) in Croatia, while the proportion of rent (19%)

and interest paid (12%) are below the EU-28 average (30% and 15% respectively).

Figure 4.1 Components and distribution of external factors in Croatia and in the

EU-28 in 2013

(average per farm)


The estimated cost of own factors (family labour, own land and own capital) accounted for

41% to the total expenses which is higher than the EU average (24%).

On the income side, average receipts per farm in Croatia stood at EUR 26 700, out of which

total output represented EUR 23 200 (87 %) and the balance of subsidies and taxes

EUR 3 500 (13 %). This ratio between the receipts items reflects exactly the EU-28

characteristics. The average amount of direct payments received per holding in Croatia was

EUR 1 140. The coastal region received slightly (7%) more direct payment per farm as the

continental one. The proportion of direct payments in total receipt (output plus net current and

investment subsidies) stood at 12.4 % which is 21% higher than the EU average (10.3%).

60

This proportion is more due to the lower output value than the difference between the average

European and Croatian amount of direct payments. This higher proportion of direct payments

in Croatia is more prominent by comparing it to the FNVA.

Figure 4.2 Proportion of direct payments to FNVA in Croatia and in the EU-28 in 2013



4.2. Financial structure of farms in Croatia

As shown in Figure 4.3, the average value of total assets per farm in Croatia stood at

EUR 154 900 which is half as much as it is in the EU-28 (EUR 320 800) in 2013. Looking at

the total asset value by types of farming, it is striking that in other permanent crop farms (such

as e.g. specialist fruit, citrus fruit and olive farms) the average total asset value per farm is the

highest compare to other types of farming and even exceed the EU-28 average. This might be

due to the recent modernisation of long-term assets (especially machinery) in this sector.

However farms specialised in various permanent crops are the most prevalent farm types

especially in the coastal region of Croatia29

, these farms have a lower physical and economic

size. Farms specialised in granivores, wine and horticulture had higher average asset value

than the national average but lower than the EU-28 average.

29 Rural Development in the EU, Statistical and Economic Information, Report 2013

http://ec.europa.eu/agriculture/statistics/rural-development/2013/full-text_en.pdf

61

Figure 4.3 Average asset value per farm by types of farming in Croatia and in the

EU-28 (average per farm in EUR)


Figure 4.4 shows that Croatian farms do not typically rely on loans. This is more related to

access to credits, since Croatian banks consider that agriculture has significant credit risk due

to high price volatility. The average liabilities per agricultural holding were the highest in

farms specialised in granivores (EUR 15 800) which is still only the third of the EU average

(EUR 47 900). Farms specialised in horticulture are the least likely to rely on loans. The low

level of indebtedness is similar to the level of other Mediterranean Member States.

Figure 4.4 Average liabilities per farm by types of farming in Croatia and in the

EU-28



62

The average farm size of the Croatian sample farms (14.6 ha) was less than half of the EU-28

average (32.8 ha). The average utilised agricultural land area was the largest in field crop

farms (23.1 ha), followed by grazing livestock farms (19.8 ha). At the other end of the

spectrum, horticultural farms were the smallest (2.3 ha).

45% of the UAA is rented in the surveyed Croatian farms while more than a half of the

agricultural area is owned by the farmers. The EU-28 characteristic is exactly the opposite.

Renting the land is more typical for field crop farms, while 80% of the UAA of farms

specialised in horticulture are owned. The average annual rent (EUR 72) Croatian farmers

have to pay for one hectare of land is 57% lower than the EU-28 average (EUR 167).

However the average land rent per hectare in farms specialised in horticulture (EUR 719) is

higher than the EU-28 average (EUR 711).

To summarise the above, it can be observed that Croatian farms differ from each other

depending on which part of the country they are. Agriculture is more common in the

continental part of Croatia. The number of farms here is nearly three times more as in the

coastal region. The average farm size is twice as large as in the Adriatic part of the country

and holdings are mostly owned by farmers. In both areas family farms are prevalent form for

farming, but in the continental areas can be found legal entities too. This latter operate much

bigger farms which are rented in 90% of the cases. Their average farm size is 183 ha which is

12 times bigger than an average family farm in the continental Croatia (15.2 ha). Generally

the average total output generated by farms situated in the continental part is nearly twice as

in the Adriatic region. Moreover if we look at the difference in output value between farms

operated by legal entities and families, the difference is striking.

The average output value achieved by legal entities in the continental region is EUR 473 000,

while only 23 000 by family farms.

Crop production is more typical for family farms in both, coastal and continental regions,

while legal entities had higher output values for livestock and livestock products. Farms in

the coastal area operate their farms with higher labour input (2.0 AWU) compared to their

counterparts in the continental region (1.7 AWU), while the difference is even higher

(multiple) in comparison with the labour input of legal entities (13.6). Legal entities benefit

mostly of the subsidies. The average total subsidies (excluding investment subsidies) received

by legal entities in the continental Croatia were EUR 62 600, which is 14 times more than

family farms benefited from. Farms in the continental Croatia produce on average

EUR 4 550 FNVA per AWU, while EUR 2 240 in the coastal region.

The highest FNVA per AWU is achieved by farms specialised in wine and field crops in the

continental part of the country, whereas field crops and dairy farms are the leaders in terms of

income in the coastal region. The average value of the net worth shows that farms inside in

the country rely more on loans and obtain a lower asset value than coastal farms.

63

FIGURE INDEX

Figure1.1: Farm net value added by Member State in 2013 ................................................ 8

Figure 1.2: Farm net income by Member State in 2013 ……….…………………………9

Figure 1.3: FNVA per AWU and remuneration of family labour per FWU by Member

State in 2013 ..................................................................................................... 10

Figure 1.4: Long-term developments in FNVA per AWU in the EU groups ..................... 11


(EU-15=100%) ................................................................................................. 11

Figure 1.6: Long-term developments in FNVA per AWUand remuneration of family

labour per FWU ................................................................................................ 12

Figure 1.7: FNVA per farm in the EU-27 by type of farming in 2013 ............................... 15

Figure 1.8: FNVA per AWU by type of farming in 2013 ................................................... 16

Figure 1.9: FNVA by EU group and organisational form in 2013 ..................................... 17

Figure 1.10: FNVA per AWU and remuneration of family labour per FWU by EU group

and organisational form .................................................................................... 17

Figure 1.11: Distribution of FNVA per AWU by EU group in 2013 ................................... 18

Figure 1.12: Distribution of FNVA per AWU by year ......................................................... 19

Figure 1.13: Distribution of FNVA per AWU by type of farming in the EU-15 in 2013 .... 20

Figure 1.14 Distribution of FNVA per AWU of dairy farms in the EU-15 by year ............ 21

Figure 1.15: Distribution of FNVA per AWU of field crop farms in the EU-15 by year .... 22

Figure 1.16: Distribution of FNVA per AWU of granivore farms in the EU-15 by year ..... 23

Figure 1.17: Lorenz curve of the distribution of FNVA in the EU-27 in 2013 .................... 24

Figure 1.18: Income components per farm by EU group in 2013 ........................................ 26

Figure 1.19: Income components per farm by type of farming in 2013 ............................... 28

Figure 1.20: Rate of return on assets by Member State in 2011 and 2013 ........................... 29

Figure 1.21: ROA in the EU-27 by type of farming in 2013 ............................................... 30

Figure 1.22: Development of the ROA by EU group ........................................................... 31

Figure 2.1: Proportion of direct payments to the total receipts by Member State in 2013 . 32

64

Figure 2.2: Proportion of direct payments to the total receipts

by type of farming in 2013 ............................................................................... 33

Figure 2.3: Proportion of direct payments to FNVA by Member State in 2013 ................. 34

Figure 2.4: Proportion of direct payments to FNVA by farm type in the EU-27, 2013 ..... 35

Figure 3.1: Long-term developments in the value of total assets (TA) and total liabilities

(TL) .................................................................................................................. 36

Figure 3.2: Average total asset value per farm by Member State in 2013 .......................... 37

Figure 3.3: Average total asset value by type of farming in the EU-27 in 2013................. 38

Figure 3.4: Composition of liabilities per farm by Member State in 2013 ......................... 39

Figure 3.5: Composition of liabilities per farm in the EU-27

by type of farming in 2013 ............................................................................... 39

Figure 3.6: Farm net worth per farm by EU group and Member State in 2011 and 2013 .. 40

Figure 3.7: Farm net worth per farm in the EU-27 by type of farming in 2013 ................. 40

Figure 3.8: Farm solvency in the EU-27 by type of farming in 2013 ................................. 42

Figure 3.9: Composition of assets by Member State in 2013 ............................................. 43

Figure 3.10: Composition of fixed assets by Member State in 2013 .................................... 43

Figure 3.11: Composition of assets by type of farming in 2013 ........................................... 44

Figure 3.12: Composition of fixed assets by type of farming in 2013 .................................. 45

Figure 3.13: Labour input per farm (in AWU) by Member State in 2013 ............................ 46

Figure 3.14: Labour input per farm (in AWU) by type of farming in the EU-27 in 2013 .... 46

Figure 3.15: Proportion of working hours of paid and unpaid labour by Member State in

2013 .................................................................................................................. 47

Figure 3.16: Proportion of working hours of paid and unpaid labour in the EU-27 by type of

farming in 2013 ................................................................................................ 47

Figure 3.17: Long-term developments in average nominal wages ....................................... 48

Figure 3.18: Average nominal wages of paid labour in 2013 ............................................... 49

Figure 3.19: Total farm UAA by Member State in 2013 ...................................................... 50

Figure 3.20: Total UAA of farms by TF in 2013 .................................................................. 51

Figure 3.21: Long-term developments in the proportion of rented land in 2013 .................. 51

65

Figure 3.22: Average land rent by farm type in 2013 ........................................................... 54

Figure 3.23: Long-term developments in land rent levels ............................................ 55

Figure 4.1: Components and distribution of external factors in Croatia and in the EU-28 in

2013 .................................................................................................................. 57

Figure 4.2: Proportion of direct payments to FNVA in Croatia and in the EU-28 in 2013 .. 58

Figure 4.3: Average asset value per farm by types of farming in Croatia and in the EU-28 in

2013 .................................................................................................................. 59

Figure 4.4: Average liabilities per farm by types of farming in Croatia and in the EU-28 in

2013 .................................................................................................................. 59

Figure 4.5: Physical farm size and Standard Output coverage of FADN compared to FSS

……………………………………………………………………….............. 66

Figure 4.6: FADN thresholds of the Member States in 2013 ..………………………….. 67

66

TABLE INDEX

Table 1.1: Development of the Gini coefficient of FNVA per AWU by EU group ............ 25

Table 1.2: Characteristics of the FSS and FADN ………………………………………... 65

MAP INDEX

Map 1.1: FNVA per AWU by FADN region in 2013 .......................................................... 13

Map 1.2: Remuneration of family labour per FWU by FADN region in 2013 .................... 14

Map 2.1: Proportion of direct payments in FNVA by FADN region in 2013 ...................... 34

Map 3.1: Average liabilities-to-assets ratio per farm by FADN region in 2013 .................. 42

Map 3.2: Average nominal wage by FADN region in 2013 ................................................. 49

Map 3.3: Proportion of rented land in the total UAA by FADN region in 2013 .................. 52

Map 3.4: Average land rent in the FADN regions in 2013 ................................................... 53

ANNEX INDEX

Annex 1: Farm Accountancy Data Network in the context of the Farm Structure Survey -

Methodology ......................................................................................................... 65

Annex 2: Definitions and their interpretations ...................................................................... 67

Annex 3: Income calculation ................................................................................................ 70

Annex 4: Threshold by Member State in 2013 (SO: Standard Output) ................................ 71

Annex 5: FNVA and remuneration of family labour per AWU by Member State and

organisational form in 2013 .................................................................................. 72

Annex 6: Number of holdings by type of farming in 2013 ................................................... 73

Annex 7: Breakdown of farm receipts and costs of EU farms in 2013 ................................. 74

Annex 8: Balance sheet components in FADN ..................................................................... 75

Annex 9: Indicators by Member State in 2013 ..................................................................... 76

67

Annex 1: Farm Accountancy Data Network in the context of the Farm Structure

Survey — Methodology

The Farm Accountancy Data Network (FADN) is a European system of sample surveys

that are run each year to collect structural and accountancy data from farms. Its aim is to

monitor the income and business activities of agricultural holdings and to evaluate the

impacts of the Common Agricultural Policy (CAP). The FADN is the only harmonised source

of micro-economic data, which means that the accounting principles are the same in all

EU Member States.

FADN is linked strongly to the Farm Structure Survey (FSS) managed by Eurostat, since the

field of survey in the FADN is based on the FSS farms population. The FSS is carried out in

all Member States in a harmonised way, whereas the characteristics are based on community

legislation. This means that comparable data are available for all countries in each survey.

The FSS population consists of all agricultural holdings in the EU of at least 1 ha.30

Although

the threshold for inclusion in the survey varies among countries, the FSS covers at least 98 %

of the total utilised agricultural area excluding common land and 98 % of the total number of

farm livestock units.

To ensure that the FADN sample provides representative data on the agricultural population

and reflects the heterogeneity of farming in Europe, the sample of farms is set up on the basis

of the typology classification in line with the FSS.

Farms are selected in the FADN sample on the basis of an official selection plan prepared by

each Member State. The selection plan is drawn up either on the basis of the most recent

statistical data from the Agricultural Census carried out every 10 years or from the FSS

carried out between censuses. Consequently, the field of survey in the FADN is actually a

subset of the FSS.31

The selection plan defines the number of farms to be selected by region, type of farming and

economic size classes. It specifies the detailed rules to be applied for selecting the holdings.

The 3-way stratification of the universe based on the common typology classification allows

it to be represented as a 3-dimensional matrix of cells. The number of farms in each cell is

derived from the FSS. Each cell corresponds to a specific category of farms. An individual

weighting is applied to each farm in the sample and corresponds to the number of farms in the

3-way stratification cell of the field of observation (or the FSS farms in a given cell) divided

by the number of farms in the corresponding cell in the sample (or the FADN farms in a given

cell). This weighting system is then used in calculating the FADN aggregated results used in

this report.

30 Member States can use thresholds other than 1 hectare, as long as they follow the coverage requirements

specified in Regulation (EC) No 1166/2008 of 19 November 2008 on farm structure surveys and the survey

on production methods.

31 Note that there are also methodological differences in data collection for the FSS and FADN. For example,

information on animals is requested in June for the FSS and an average of the number of animals over the

year is used in the FADN. The FSS requests information on other gainful activities in the form of a

template, while in the FADN this information is calculated on the basis of accounts.

68

Table 1.2 Characteristics of the FSS and FADN

FSS

FADN

Type of data Full population Sample of market-oriented farms

Extrapolation to the population based on

weighting factors

Thresholds Alternative thresholds (minimum

coverage should be guaranteed)

Based on Standard Output (formerly

SGM); separate thresholds for each

Member State

Sampling frequency 3-4 year interval Annual

Time series 1999; 2003; 2007; 2010 1989-2013

Spatial resolution Local Administrative Unit Farm identification at NUTS3 level

Information Structural Financial and structural

The FADN intends to cover Europe’s agricultural holdings as fully as possible in order to

represent the largest possible proportion of total agricultural output, area and farm labour

represented in the FSS (Figure 3.24).

Figure 4.5 Physical farm size and Standard Output coverage of the FADN compared

to the FSS 2013

Note that the FADN’s field of survey does not cover all agricultural holdings in the EU but

only those which, due to their size, can be considered as market-oriented.

69

Market-oriented farms must exceed a minimum economic-size threshold measured in

Standard Output32

.

Because of the different farm structures in the European Union, each Member State specifies

their own thresholds. The threshold should ideally ensure high overall FADN coverage of the

FSS population in terms of Standard Output, but also of Utilised Agricultural Area and

Livestock Units at country level. The economic size thresholds range from as low as

EUR 2 000 in Bulgaria and Romania to as high as EUR 25 000 in Belgium, Germany, France,

Luxemburg, the Netherlands and the UK (Figure 3.25).

Figure 4.6 FADN thresholds in Member States in 2013 (in EUR)

The FADN is primarily designed to evaluate income and financial indicators. It is not suitable

for providing data on the farm structure of all farms, because it does not include the whole

agricultural population and applies thresholds. Furthermore, the FADN does not focus on the

production totals but on average values per farm.

The most recent FADN data available for this report are for the 2013 accounting year.

The sample consisted of approximately 86 000 holdings in the EU-28, which

representing nearly 5 million farms (46%) out of the total of 10.8 million farms included

in the FSS 2013.

32 Standard Output (SO) is the average monetary value of the agricultural output at the farm-gate price of

each agricultural product (crop or livestock) in a given region. The SO is calculated by Member States per

hectare or per head of livestock, by using basic data for a reference period of five successive years. The SO

of the holding is calculated as the sum of the SO of each agricultural product present in the holding

multiplied by the holding’s number of hectares or heads of livestock. The SO coefficients are expressed in

euros and the economic size of the holding is measured as the total standard output of the holding expressed

in euros. Previously, using rules set by Decision 85/377/EEC, the economic size was measured as the total

Standard Gross Margin (SGM) of the holding expressed in European Size Unit (ESU) instead.

70

Annex 2: Definitions and their interpretations

Farm receipts recorded in the FADN accounts

Output: This includes crops and livestock production as well as other output if it is directly

linked to a farm’s activity, e.g. farm tourism, forestry, renewable energy, etc. It does not

include a household’s non-farm income.

Direct payments: In the context of this analysis, direct payments refer to all farm subsidies

on crops, livestock and livestock products linked to the production. They also include the

single farm payment and single area payment scheme. Additional aid is included too.

Investment subsidies: Investment subsidies can be regarded as part of the Pillar II payments.

However, they are shown separately because they are treated differently in the calculation of

income estimates. As in the case of Pillar I and Pillar II-type payments, they include national

payments.

Costs items recorded in the FADN accounts

Intermediate consumption: This is the total of the specific costs and overheads arising from

production in the accounting year. Intermediate consumption, for example includes the costs

of feed, fertilisers, crop protection and energy.

Depreciation: This is depreciation of capital assets estimated at their replacement value.

(Net) Farm taxes: These are farm taxes, less VAT, plus other taxes on land and buildings.

Subsidies on taxes are deducted. Personal income taxes are not taken into account.

(Net) Taxes on investment: These are taxes not arising from current productive activity in

the accounting year, net of subsidies.

Wages: This covers wages and social security charges. Amounts received by workers

considered as unpaid workers (wages lower than a normal wage) are excluded.

Rent: This covers rent paid for farm land and buildings and rental charges.

Estimation of the imputed unpaid family factor costs

Family labour cost: This cost is estimated on the basis of wages which farm owners would

have to pay if they were to hire employees to do the work carried out by family members.

It is estimated as the average regional wage per hour based on the FADN data33

multiplied by

the number of hours worked by family workers on the farm. It is commonly acknowledged

that the number of hours worked by family workers is typically overestimated. Thus, a ceiling

of 3 000 hours per Annual Work Unit is applied (this is the equivalent of 8.2 hours a day,

365 days a year, and corresponds more or less corresponds to the time that can be spent on a

farm by farmers milking cows).34

33 If there are not enough farms (fewer than 20) with paid labour at regional level, the national average is used.

34 One limitation of this estimation method is that if a farmer were to receive a salary he would probably work

less.

71

The use of hours makes it possible to give managers more remuneration than employees, if

they work more hours.

Reliable family labour cost estimates are difficult to obtain as records of hours worked on the

farm might be overestimated and it is not easy to determine what an appropriate remuneration

for family labour is. Farmers may agree to be remunerated at a below-average wage if they

consider farming as a way of life or have other sources of income for their household

(e.g. other gainful activities directly related to the holding, spouse working outside the farm,

etc.).

Own-capital cost

– Own-land cost: This cost is estimated on the basis of the rent that farm owners would have

to pay if they were to rent the land they are using. It is estimated as the owned area

multiplied by the rent paid per hectare on the same farm or, if there is no rented land on the

farm, multiplied by the average rent paid per hectare in the same region and for the same

type of farming35

.

– Cost of own capital (except land): The cost of own capital (permanent crops, buildings,

machinery and equipment, forest land, livestock and crop stocks) is estimated at its

opportunity cost. That is how much money the farmer could earn if he were to invest the

equivalent of its capital value in ‘safe’ financial assets.

The interest paid on capital is not known, as this information is optional in the FADN farm

return. Nevertheless, in order to take into account the actual interest rate paid on a farm, a

‘weighted’ interest rate is calculated as the weighted average of this interest rate for liabilities

and the long-term interest rate obtained from Eurostat. It should be noted that if the

‘weighted’ interest rate is lower than the long-term interest rate (which means that the

calculated rate of interest paid is lower than the long-term interest rate), the long-term interest

rate is used instead of the ‘weighted’ interest rate.

35 If there are not enough farms (fewer than 20) in a given region for a given type of farming, the national rent

per hectare for this type of farming is used (based on the TF8 classification).

72

Own-capital value (excluding land and land improvement) is estimated as the average value

of the assets (closing plus opening valuation divided by two) multiplied by the real interest

rate36

. The correction is made by subtracting the inflation rate37

from the nominal interest rate.

The value of total circulating capital is not taken into account in the estimation process as data

in some Member States are not sufficiently reliable. The crop stocks value is included,

however.

To calculate unpaid capital costs, the interest paid is deducted from the sum of the own-land

cost and the cost of own capital except land to avoid double counting. The total capital cost

must be at least equal to the interest paid:

Imputed unpaid capital costs = Max (interest paid; own-land cost + estimated cost for

own capital except land – interest paid)

36 Any increase in the value of assets is excluded from income calculations. For example, land appreciates in

value over time, which is one of the reasons why investors invest in land. This gain is not included in the

income; therefore it would not be consistent to include it in the cost of capital. In addition, in the FADN

assets are valued at replacement value. Depreciation is based on this replacement value and therefore

already takes the increase in prices (inflation) into account. Consequently, it would be double counting to

include the inflation part of interest in the cost of capital.

37 The inflation rate is based on the Eurostat annual average rate of change in the Harmonised Indices of

Consumer Prices (HICPs), available from 1997. Inflation rates based on a GDP deflator and on a deflator of

gross fixed capital consumption have been tested, but were found to lead to very high negative costs for

capital, mainly in the EU-N13. An inflation rate calculated on the basis of price indices for gross fixed

capital consumption has been tested, as it seemed to be more closely related to assets. However, this rate has

been fluctuated widely over the years for certain Member States. In addition, land is one of the most

important assets which does not depreciate. It follows that the inflation rate of gross fixed capital

consumption may not be more closely linked to the change in the price of agricultural assets than with the

consumer price indices.

73

Annex 3: Income calculation


74

Annex 4: Threshold by Member State in 2013 (SO38

: Standard Output)

Member State

Threshold

(in 1000

EUR)

Belgium 25

Bulgaria 2

Cyprus 4

Czech Republic 8

Denmark 15

Germany 25

Greece 4

Spain 4

Estonia 4

France 25

— France (Guadeloupe) 15

— France (Martinique) 15

— France (La Réunion) 15

Croatia 4

Hungary 4

Ireland 8

Italy 4

Lithuania 4

Luxembourg 25

Latvia 4

Malta 4

Netherlands 25

Austria 8

Poland 4

Portugal 4

Finland 8

Sweden 15

Slovakia 25

Slovenia 4

Romania 2

United Kingdom 15

— United Kingdom (Northern Ireland) 15

38 The Standard Output (SO) is the average monetary value of the agricultural output at the farm-gate price of

each agricultural product (crop or livestock) in a given region. The SO is calculated by Member State per

hectare or per head of livestock, by using basic data for a reference period of five successive years. The SO

of the holding is calculated as the sum of the SO of each agricultural product present in the holding

multiplied by the holding’s relevant number of hectares or heads of livestock. The SO coefficients are

expressed in euros and the economic size of the holding is measured as the total standard output of the

holding expressed in euros.

75

Annex 5: FNVA and remuneration of family labour per AWU by Member State and organisational form in 2013


Source: DG AGRI EU-FADN Note. Where no information is displayed in a column, this is for confidentiality reasons (i.e. there were fewer than 15 holdings in the given category of the 2013 sample).

76

Annex 6: Number of holdings by type of farming in 2013

Farms represented Sample farms

Types of farming Sum Sum

Field crops 1 139 135 25 028

Horticulture 177 301 5 138

Wine 290 859 4 503

Other permanent crops 697 951 6 821

Milk 648 276 14 563

Grazing livestock 836 404 12 395

Granivores 170 854 5 665

Mixed (crops and livestock) 1 052 720 12 163

Total groups 5 013 500 86 276 Source: DG AGRI EU-FADN

77

Annex 7: Breakdown of farm receipts and costs of EU farms in 2013


Source: DG AGRI EU-FADN. Note: Receipts (Rec), Expenses (Exp).

78

Annex 8: Balance sheet components in the FADN


79

Annex 9: Indicators by Member State in 2013

Member

State

FNVA FNVA per

AWU

Income

remaining

per FWU

(*)

Return

on

assets

Proportion

DIRECT

PAYMENTS

in farm

receipts

Proportion

DIRECT

PAYMENTS

in FNVA

Average

asset

value

Average

liabilities Net worth

Paid

labour

input

Unpaid

labour

input

Wages /

hour

Average

UAA

Proportion

of rented

land

Level of

rents

EUR EUR/AWU EUR/FWU % % % EUR EUR EUR % % EUR/hour ha % EUR/ha

BE 86 559 41 042 33 448 3.3% 6.9% 23.2% 720 729 189 833 530 896 17.5% 82.5% 11.0 49.3 73.2% 284.2

BG 19 483 7 903 3 567 7.7% 16.8% 42.3% 77 652 16 299 61 353 52.6% 47.4% 2.0 35.2 87.3% 177.6

CY 15 876 11 275 8 073 1.9% 7.9% 22.6% 179 583 8 947 170 636 27.2% 72.8% 3.9 9.1 67.2% 177.6

CZ 138 604 20 814 17 694 4.2% 17.2% 54.2% 985 969 222 094 763 875 78.0% 22.0% 6.4 232.9 80.9% 77.3

DK 162 003 89 327 50 943 2.6% 6.9% 21.9% 2 523 260 1 469 795 1 053 465 52.4% 47.6% 23.2 96.8 29.9% 612.5

DE 95 768 42 838 29 632 3.3% 9.8% 31.2% 888 949 180 912 708 037 41.8% 58.2% 10.9 86.6 66.0% 262.3

EL 12 811 11 800 4 132 3.3% 21.5% 46.5% 108 009 394 107 616 16.5% 83.5% 3.2 9.3 52.2% 203.3

ES 28 623 21 246 16 403 2.7% 13.1% 28.5% 261 885 6 917 254 967 23.5% 76.5% 7.4 39.3 36.8% 114.6

EE 32 218 16 206 13 243 2.8% 11.9% 50.4% 266 001 86 228 179 773 55.9% 44.1% 6.1 128.3 60.9% 29.8

FR 62 665 30 724 21 062 1.3% 12.0% 42.9% 441 328 174 773 266 556 31.3% 68.7% 13.8 85.9 87.9% 172.0

HR 7 212 3 870 1 300 -4.8% 15.0% 55.6% 154 886 3 896 150 990 12.2% 87.8% 4.2 14.6 45.0% 72.1

HU 28 848 18 520 15 275 7.3% 16.5% 45.9% 172 167 28 331 143 837 58.6% 41.4% 4.1 45.0 62.2% 120.8

IE 28 281 23 465 7 240 -0.2% 17.1% 54.1% 926 583 23 471 903 112 6.5% 93.6% 10.4 51.4 18.9% 245.3

IT 26 707 21 454 16 646 0.1% 9.3% 20.3% 389 804 2 756 387 049 20.0% 80.0% 8.7 15.5 46.7% 183.2

LT 16 404 8 959 7 634 4.1% 14.5% 46.2% 121 519 17 660 103 859 19.0% 81.1% 3.0 50.3 51.5% 42.3

LU 65 291 37 007 28 220 1.2% 9.9% 37.4% 1 151 439 267 712 883 727 18.7% 81.3% 12.1 78.5 52.2% 218.7

LV 16 725 8 178 4 742 0.5% 13.5% 56.6% 147 389 44 357 103 032 32.8% 67.3% 3.8 69.2 47.2% 25.1

MT 12 947 9 128 6 168 0.1% 4.6% 15.1% 194 903 7 855 187 048 13.2% 86.8% 4.3 2.6 82.8% 76.0

NL 147 865 54 793 47 418 2.0% 2.9% 9.8% 2 285 939 772 992 1 512 948 43.6% 56.4% 15.5 34.6 40.1% 777.9

AT 30 012 20 894 15 225 0.2% 9.4% 29.1% 452 770 50 465 402 305 7.0% 93.0% 8.5 32.4 27.6% 231.9

PL 11 951 6 947 4 205 0.1% 13.4% 41.4% 165 862 9 564 156 299 12.1% 87.9% 3.2 19.1 26.8% 69.9

PT 15 765 10 008 6 527 2.7% 14.5% 33.4% 107 447 3 030 104 417 19.5% 80.6% 4.4 25.5 27.2% 94.8

RO 7 293 5 869 3 970 4.0% 11.6% 23.5% 39 592 603 38 989 11.5% 88.5% 1.7 9.9 55.0% 86.9

FI 31 387 24 040 13 054 -1.9% 15.8% 78.8% 435 161 115 642 319 519 20.2% 79.8% 14.0 55.5 34.6% 211.8

SE 52 615 36 633 8 252 -2.7% 11.1% 50.4% 898 861 301 485 597 376 20.0% 80.0% 21.4 102.5 53.7% 217.2

SK 176 076 11 352 925 -0.9% 15.8% 68.8% 1 068 131 169 984 898 147 94.5% 5.5% 6.0 594.8 94.5% 47.3

SI 5 905 4 172 -185 -2.8% 13.9% 76.9% 199 035 3 598 195 437 4.1% 95.9% 4.5 11.4 33.5% 102.6

UK 83 846 38 184 27 774 1.0% 11.1% 39.5% 1 807 977 178 882 1 629 095 40.4% 59.6% 11.3 166.1 42.7% 137.3

EU-28 27 864 18 110 11 420 1.4% 11.2% 32.6% 320 788 47 882 272 905 22.8% 77.2% 7.4 32.8 53.8% 166.7

EU15 40 515 27 020 17 893 1.4% 10.6% 31.0% 490 041 79 114 410 927 25.6% 74.5% 10.3 42.6 54.1% 194.9

EU-N13 12 027 7 575 4 350 1.6% 14.1% 39.5% 108 913 8 786 100 127 19.9% 80.1% 3.3 20.5 53.0% 91.7


(*) After deducting all economic costs except the opportunity costs for family labour.

European Commission

EU Farm Economics Overviewbased on 2013 FADN

Disclaimer:This publication does not necessarily reflect the official opinion of the European Union. Neither the European Union institutions and bodies nor any person acting on their behalf may be held responsible for the use which may be made of the information contained therein.

Contact:European CommissionDG Agriculture & Rural Development,Microeconomic analysis of EU agricultural holdingsEconomic analysis of EU agricultureE-mail: [email protected]: http://ec.europa.eu/agriculture/rica/index.cfm

European CommissionDirectorate-General for Agriculture and Rural Development

http://ec.europa.eu/agriculture

This report provides an overview of key economic developments in the European agricultural sector based on the latest data available in the Farm Accountancy Data Network (FADN) which are from 2013.

eu farm economics overview fadn...

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